.png){kind=logo}
Major Bitcoin crashes were triggered by exchange hacks, technical failures, government actions, and weak company practices—not random events.
Low liquidity and high leverage made price drops deeper and faster during panic selling.
Despite sharp falls, Bitcoin has repeatedly recovered, leading to stronger security and a more mature crypto market over time.
Bitcoin has grown from a new idea to a major financial force. Its price has gone up and reached record highs. This does not mean that the journey of growth and development has been smooth and easy. More than once, Bitcoin faced huge falls that shook the crypto world and scared investors. The biggest bitcoin crashes in history show how fast this digital asset can lose value.
These crashes were not random chances. Each one had a clear reason. While some crashes were due to exchange problems, others were caused by sudden fear in markets. Understanding each event shows how the crypto world has changed over time and what has caused these sharp price drops.
In this article, the focus stays on real crashes that wiped out huge amounts of value and on what caused them. Each event has its own story and offers lessons about risk, trust, and the power of community in the crypto space.
The first major crash of Bitcoin came in June 2011. With a value of around US$32, the trade was exciting in the market. The largest exchange at the time was Mt. Gox, handling nearly 90% of all Bitcoin trades.
Hackers found a way into its systems and used stolen credentials to make fake sell orders. This led to a price drop of nearly 99%, the pricing hitting an all-time low of one cent at one point. This drop happened within minutes, and many traders lost money. Confidence in the market fell sharply, as it was small and had very low liquidity, causing even small amounts of sales to push prices down quickly.
After the crash, most trades were reversed, and the price recovered modestly. Still, this crash remains one of the most dramatic Bitcoin price crash events. It taught the world that exchange security needed to improve fast.
The next big crash came in April 2013. Bitcoin reached around US$259, leading many to believe it was on a strong upward path. However, heavy online attacks on the Mt. Gox platform stopped trading for days as attacks overwhelmed the exchange servers.
Traders could not buy or sell, and fear spread fast among investors. Panic selling was the immediate effect after trading resumed. Bitcoin’s price dropped by around 83%, falling to about US$45.
This crash showed how technical problems at major exchanges can bring down the entire crypto market, even as the wider world continues to believe in Bitcoin.
The period between late 2017 and early 2018 witnessed another big fall. Bitcoin hit a record peak of nearly US$19,500 in December. Many new projects, known as initial coin offerings, raised large amounts of money in a short time. This hype pushed prices up quickly. When the excitement faded, many of these new coin projects failed or faced legal scrutiny. Regulatory pressure increased in many countries.
In the meantime, hackers targeted exchanges in South Korea and Japan. The combined effect was huge. Bitcoin fell by about 84% and hit around US$3,200 by early 2018.
This event, known as the ICO bust, taught investors that hype without solid value could create dangerous bubbles, and prices would drop fast when the bubble broke.
Also Read: Why is Bitcoin Crashing? Top Reasons Behind Major Price Drops
In March 2020, the bitcoin world beheld a different type of crash. Markets all over the world were shaken as fear spread with the new global health crisis. Stock markets fell sharply, and traders rushed to sell risky assets, including Bitcoin.
Bitcoin dropped around 50% in a single day, falling from around US$8,000 to about US$4,000. More than one billion dollars in leveraged positions were liquidated across major exchanges.
This trading pressure pushed prices down rapidly. This crash showed that Bitcoin does follow global markets in moments of fear. It also showed limits in market depth when big moves occurred.
Another major crash followed in May 2021. Bitcoin had just reached a new peak of nearly US$64,000 when the news hit the market. Large mining operations inside China were being stopped.
Bitcoin mining power around the world dropped roughly 50% in weeks. At almost the same time, a major carmaker also halted acceptance of Bitcoin payments.
This double shock led to a sell-off that pushed Bitcoin from around US$64,000 to about US$30,000, recording a 53% drop. Margin calls and leveraged selling made the fall bigger than many expected. The market eventually rebuilt strength, and confidence returned as mining moved to other countries.
The last major crash on this list came in late 2022 with the FTX collapse. FTX was one of the biggest crypto exchanges. When reports came out showing a huge funding problem and a lack of liquidity, traders rushed to withdraw funds.
The exchange could not meet these requests, and Bitcoin fell about 23% from around US$21,000 to about US$15,600. Fear spread across exchanges and lending platforms. The FTX crash showed that a lack of transparency and bad practices at major firms can send shockwaves through the entire crypto market.
Also Read: Bitcoin Under Attack? The Hong Kong Fund Controversy
Looking back at the biggest bitcoin crashes in history, one clear pattern shows up. When confidence falls quickly, traders sell fast. Low liquidity and high leverage deepen price drops. Changes to government policies or rules can trigger panic. Yet Bitcoin has always found a way to recover over time. These crashes left scars but also led to better security and stronger markets.
Understanding what caused each crash makes the crypto world less mysterious and scary. It shows that Bitcoin, like all financial assets, can fall hard when stress hits. But it also shows that recovery often follows even with the deepest price drop.
What is the biggest crash in Bitcoin history?
Ans. The biggest crash in Bitcoin history happened between November 2013 and January 2015, when the price fell by 86.2 percent. It was Bitcoin’s first major collapse, wiping out most of its value over 14 months and shocking early investors worldwide.
What caused Bitcoin crashes?
Ans. One major cause of a massive Bitcoin crash was high-leverage trading by Hong Kong investors. Many traders placed risky bets using borrowed money. When prices moved against them, forced selling triggered a sharp fall, leading to panic and heavy market losses.
Did Tesla dump 75% of its Bitcoin?
Ans. Yes, in July 2022, Tesla sold around 75 percent of its Bitcoin holdings. The company offloaded about $936 million in Bitcoin amid macroeconomic uncertainty and overall market stress, reducing its exposure to cryptocurrency volatility.
What is the biggest threat to Bitcoin?
Ans. The biggest threat to Bitcoin is uncertainty about its future. Experts say it is unclear whether cryptocurrency will remain relevant in the long term. There is a possibility that interest could fade, raising concerns about its long-term stability and value.
Who lost the password for 7000 Bitcoin?
Ans. Stefan Thomas lost the password to a digital wallet holding 7,002 Bitcoins, worth hundreds of millions of dollars. He has only two attempts left before the secure device permanently locks, making the fortune potentially inaccessible forever.
What if I invested $1000 in Bitcoin in 2010?
Ans. If you had invested $1,000 in Bitcoin in 2010, when it traded below $0.01, your investment could be worth between $460 million and $1.6 billion by 2024–2025. It would represent one of the highest returns in financial history.
Who sold 10,000 Bitcoin for pizza?
Ans. Laszlo Hanyecz sold 10,000 Bitcoin for two pizzas on May 22, 2010. The pizzas were from Papa John's. This historic deal became known as Bitcoin Pizza Day and marked the first real-world Bitcoin transaction.
Join our WhatsApp Channel to get the latest news, exclusives and videos on WhatsApp
_____________
Disclaimer: Analytics Insight does not provide financial advice or guidance on cryptocurrencies and stocks. Also note that the cryptocurrencies mentioned/listed on the website could potentially be risky, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. This article is provided for informational purposes and does not constitute investment advice. You are responsible for conducting your own research (DYOR) before making any investments. Read more about the financial risks involved here.
