On March 14, 2024, Bitcoin (BTC) hit its all-time high of $73,750, an unexpected turn of events after a crypto winter that only seemed to drag on for longer than anticipated.
However, this bull run has seen a retracement as the cryptocurrency faced a dip of 16.5%, down to $61,000 just six days later, according to CoinMarketCap.
While crypto experts attributed this Bitcoin price crash to several factors, including excessive market leverage, Ethereum’s Dencun upgrade, and a more negative view over the Ethereum spot ETFs approval, the decline was BTC’s biggest single-day loss since November 9, 2022, when the cryptocurrency’s value fell by 14% following the collapse of FTX.
At the time of writing, April 2, Bitcoin has gained back some of its lost ground and currently stands at $65,441. However, let’s analyze the top five Bitcoin crashes and learn whether analysts believe the BTC price might fall again this year.
Key Takeaways
The history of Bitcoin crashes highlights the token’s susceptibility to external influences, including regulatory challenges, global economic events, and corporate decisions.
The inherent volatility of Bitcoin amplifies its susceptibility to price crashes, particularly during periods of heightened risk sentiment.
Examining past Bitcoin crashes reveals valuable lessons about market dynamics and investor behavior. Analyzing these historical patterns can inform risk management strategies and investment decisions in the cryptocurrency market.
Despite experiencing significant price crashes, Bitcoin has demonstrated resilience and continued growth over time. Technological advancements like the lightning network and increasing adoption contribute to Bitcoin’s evolving ecosystem.
Experts remain optimistic about Bitcoin’s long-term prospects, citing expanding use cases and growing demand.
The Bottom Line
Table of Contents
Five Biggest Bitcoin Crashes Ever
In general, Bitcoin price crashes often occur due to either the miners’ capitulation or a crash in the wider financial market, Yuya Hasegawa, an analyst at crypto exchange Bitbank, told Techopedia.
“Miners’ capitulation is a direct cause for the price to crash and it is usually caused when the price dips below a break-even point for bitcoin mining. This tends to happen at the end of a long-term downward trend.
“The latter cause is rather indirect but connected by market sentiment across different asset classes.”
Bitcoin’s volatility also makes it more susceptible to price crashes, so the BTC value thrives when liquidity is high and risk sentiment is low.
Summary of the Latest and Biggest Bitcoin Crashes
DateValue Drop (%)Key Reasons for the BTC CrashMarch 202316.5The negative impact of the Ethereum Dencun upgrade on crypto markets and the diminishing likelihood of releasing an ETH spot ETF by May 2024.May 202224.3Terra UST and LUNA crash.May 202140.4Tesla suspended vehicle purchases using Bitcoin, and China banned the trading and mining of BTC.March 202045.9COVID-19 pandemic.December 2017 – February 201856.9Overvaluation of crypto tokens, which forced markets to face volatility.
1. March 2024: 16.5%
BTC price March 2024. Source: CoinMarketCap
Last on our list of top 5 Bitcoin crashes is the cryptocurrency’s most recent crash, which saw the asset drop from a new all-time high of $73,750 on March 14, 2024, down to $61,538 on March 20, 2024.
But why did Bitcoin crash after seeing such a positive run?
The most recent Bitcoin crash was attributed to several factors, including a negative impact of Ethereum on market dynamics following the blockchain’s most recent Dencun upgrade and the diminishing likelihood of the release of an Ether spot ETF by May 2023.
2. May 2022: 24.3%
BTC price May 2022. Source: CoinMarketCap
Even though the Bitcoin price saw a massive drop in 2021, the year stayed an arguably successful one for the cryptocurrency as it managed to reach past $60,000 for the first time ever and continued to trade in high territories for several months before dropping once again in May 2022.
Between May 2, 2022, and May 24, 2022, the token value fell by 24.3% from $38,472 to $29,101 respectively.
The dip in Bitcoin’s worth came at the same time as the crash of Terra’s algorithmic stablecoin, UST, and its sister cryptocurrency LUNA.
Later, in November 2022, the BTC price saw another massive dip, falling by 14% following the collapse of FTX.
3. May 2021: 40.4%
BTC price May 2021. Source: CoinMarketCap
In May 2021, BTC saw another major price movement, losing over 40% of its value in just two weeks and falling from a high of $58,000 on May 10, 2021, down to $34,700 by May 24, 2021.
The 40.4% drop was said to have been a reaction to a new government policy announcement in China that restricted the mining and trading of Bitcoin with the aim of preventing and controlling financial risks.
In addition, that same month, Tesla suspended vehicle purchases using BTC, which could have further pushed the Bitcoin crash.
4. March 2020: 45.9%
BTC price March 2020. Source: CoinMarketCap
In March 2020, the Bitcoin price witnessed another massive crash, falling from a high of $10,313 on February 15, 2020, to $5,573 on March 14, 2020.
Of course, the pandemic was one of the main reasons why BTC saw a 45.9% drop in value during that time when major global economies were dealing with the blow of the pandemic.
Bitbank’s Hasegawa noted that BTC tends to be the first thing investors choose to sell when risk sentiment intensifies due to its potential downsides being much higher than those of other, more traditional assets.
Additionally, when the stock market crashes, some investors tend to sell their BTC holdings in an attempt to meet margin calls.
This tends to exacerbate Bitcoin’s downfall, thus forcing miners to sell their holdings, which could have been what happened in the first year of the COVID-19 pandemic.
Throughout 2020, the Bitcoin value found it hard to recover and only started to gain some traction by the end of the year.
5. December 2017 – February 2018: 56.9%
BTC price December 2017 – February 2018. Source: CoinMarketCap
In December 2017, the Bitcoin value saw massive gains, surging by more than 165% between mid-November that year and hitting its then-all-time high of $17,760 on December 20, 2017.
However, following a pretty successful year, the token’s price started to decline, first losing around 10% of its value in just eight days and then continuing a fall and dropping down to $15,000 before plunging to $7,600 by February 8, 2018, and losing over 56% of its past gains.
Elaine Song, the VP of strategy at HBAR Foundation, told Techopedia that the preceding bull run in crypto markets in 2017 led to an “overvaluation of crypto tokens,” which forced the markets to face unprecedented volatility that could have led to the Bitcoin crash.
Song added:
“The underlying Web3 technologies that stood as the foundation of this emerging economy were yet to achieve mainstream implementation, which strengthened the linear impact of cryptocurrencies on the wider crypto ecosystem. The space also drew mass public skepticism in the wake of this volatility, and over half of ICO-funded startups launched the year before failed to get their feet off the ground.”
Is Bitcoin Going to Crash, Again?
While the BTC price has managed to momentarily recover following its most recent crash and currently stands at $65,441 (at the time of writing, April 2, 2024), one of the biggest questions bothering investors is: will Bitcoin crash again?
Commenting on the Bitcoin price projections, experts are noting that it is very unlikely and unrealistic for BTC to fall as low as $0.
Aki Balogh, the co-founder and CEO of DLC.Link, told Techopedia:
“What the price will be by year-end is difficult to answer right now, but I believe reaching and overtaking a $100,000 price is very possible.”
Bitbank’s Hasegawa added that in the current market environment, the use case of BTC continues to expand, which gives another reason why the token is unlikely to fall.
“There has been an interesting development in the field of Bitcoin’s lightning network – Bitcoin’s payment layer. Lightning Lab has developed a protocol that will allow AI agents to connect to lightning wallets. This will allow AI agents to participate in economic activities and could enhance productivity.”
Additionally, DLC.Link’s Balogh noted that in the coming months, especially following the upcoming BTC halving, demand for BTC will only continue to grow, thanks to the launch of BTC ETFs and the demand for block space due to Ordinals and other assets as well as the launch of “Building on Bitcoin” projects.
The Bottom Line
Bitcoin’s tumultuous journey, punctuated by significant price crashes, underscores the complex interplay of factors shaping the cryptocurrency market.
From regulatory shifts to global economic crises, external events have exerted substantial influence on Bitcoin’s value.
However, amidst these challenges, BTC continues to display remarkable resilience, aided by technological innovations and its continuously expanding adoption.