It’s safe to say that Bitcoin has seen its fair share of ups and downs. After reaching peaks in 2017, the cryptocurrency market saw its worst year in 2018 when Bitcoin lost more than 70% of its value. Since then, it has slowly recovered however, pundits believe that for it to cross the 2017 records, it will take some time.
Why Does Bitcoin Crash?
The price of Bitcoin might fluctuate for a number of reasons. For example, things like security breaches, price speculation, and global events can all cause Bitcoin volatility.
The Top 5 Bitcoin Crashes in History
- June 8th, 2011 – October 19th, 2011
Bitcoin’s initial release took place in Jan 2009, and after being available for more than two years, its price took a massive fall of a shocking 93.7% to a price of just $2.00.
However, despite the astronomical losses that occurred, it took less than two years for Bitcoin to recover from the loss and surpass its value that was before the crash.
- August 17th, 2012 – August 20th, 2012
Bitcoin then recovered from a loss of 93.7% in just a year, but then in a span of just three days, Bitcoin prices were slashed from $15.40 to $7.60 amounting to a total loss of 50.6%.
This crash was a result of Priateat40, one of Bitcoin’s earliest adopters, deciding to stop accepting Bitcoin payment.
- April 10th, 2013 – April 16th, 2013
Similar to what happened in August of 2012, the crash in April 2013 took less than a week to decimate the value of Bitcoin. On April 10th, you could purchase Bitcoin for $266.00. But by April 16th, the price had slipped to a measly $50.00.
Many suspect this 81.2% price decline was a result of Bitcoin finally finding its way into mainstream media coverage. Once the spotlight was on, a flood of investors rushed in to purchase Bitcoin, causing the price to grow at an unsustainable rate. And as with most bubbles, the price of Bitcoin collapsed shortly after.
- November 29th, 2013 – February 21st, 2014
The reason for this crash was twofold. First, as Bitcoin became more popular, more people started flooding into the market. This created a bubble effect and drove prices higher. Eventually, the bubble burst, kickstarting a rapid decline in the price of Bitcoin.
To make matters worse, Mt. Gox halted withdrawals on February 10th of 2014, sending Bitcoin holders into a panic. They would also later announce that they lost more than 850,000 Bitcoin to cybercriminals and that they were filing for bankruptcy.
When it was all said and done, Bitcoin dropped 92.6% in value during the span of this crash.
- December 17th, 2017 – December 15th, 2018
After the dust had settled from the 2013-2014 crash, the price of Bitcoin chugged steadily along until it exploded in 2017. During this year, it would double in value several times before reaching an all-time high exceeding $20,000.
Unfortunately, all good things must come to an end. Over the next year, the price dropped 84% until it reached a low of $3,191.30 in December of 2018.
Following the “Great Crypto Crash,” Bitcoin continued to do what it always does after a crash – rebound. After December 2018, it climbed steadily to a high of $13,796.49 up till late June. From there it declined again and settled around $10,000.00.
The Present And The Future
Like many other areas of the economy, Bitcoin has been hit hard by the recent COVID-19 Pandemic. The price dropped as much as 63.1% from February 12th to March 12th in 2020. To put it into perspective, the price on Feb 12 was $10.393.61, highest of 2020 and on Mar 12, it was $4,860.35.
Since then, it has been steadily climbing back up and is now holding fast at around $6,500. Only time will tell if it will continue to do so.
As is the case with many types of investments and currencies, Bitcoin experiences ups and downs, which include the occasional crash. While Bitcoin’s history of volatility might scare some people away, it’s important to remember that it has a strong track record of successfully rebounding in a relatively short period of time.