1. The Mt. Gox incident
In February 2014, the Mt. Gox incident was regarded as one of the most serious events in the history of the cryptocurrency circle. At that time, the world's largest Bitcoin exchange, MTGOX, was hacked, losing nearly 850,000 Bitcoins, accounting for 7% of the total Bitcoin supply. This incident not only caused Bitcoin to plummet by 80% but also triggered a crisis of trust in the cryptocurrency market.
2. The 94 incident
The 94 incident occurred in 2017 and was triggered by regulation from mainland China.
On September 4, 2017, the central bank and seven ministries defined ICO (Initial Coin Offering) as an illegal public financing activity without approval. The announcement stated that ICOs were suspected of illegal token issuance, illegal securities issuance, and illegal fundraising, severely disrupting the economic and financial order.
After the announcement, exchange tokens experienced a cliff-like decline, with various tokens falling below their issuance prices. Bitcoin dropped by 32%, and in one night, 100,000 people in the cryptocurrency circle lost 160 million in assets, marking a dark moment.
3. The 312 incident
On March 12, 2020, according to Binance data, Bitcoin dropped from about $7,900 to around $4,410, and on March 13, it reached a dark moment, falling to approximately $3,780, with a maximum drop of over 50% in two days. At that time, due to the pandemic, the global economy was in recession, and the U.S. stock market had already begun to plummet. Many cryptocurrency investors viewed Bitcoin as a safe-haven asset, but whether an asset is considered a safe haven ultimately depends on broader investor consensus.
4. The 519 incident
On May 18, 2021, the central bank issued a statement, and the three major associations in the financial industry announced that providing virtual currency trading services was suspected of engaging in illegal financial activities. There was no significant drop that day, but by the night of May 19, Bitcoin fell from around $44,000 to approximately $29,000, a drop of 34%.
5. The Luna black swan event
This event can be traced back to a South Korean individual, Do Kwon, who established a public chain ecosystem called Terra, which mainly operates through these two coins:
One is the token Luna on the Terra ecosystem.
The other is the stablecoin UST existing on the Terra chain.
These two coins interact as follows:
One UST = 1 dollar's worth of Luna. This means that if the price of Luna is 1 dollar, you can exchange it for one UST; if the price of Luna rises to 100 dollars, you can exchange it for 100 UST.
UST and Luna have a relationship of 'mutual burning and minting.' This means that when you exchange Luna for UST, there is one less dollar's worth of Luna in the market and one more UST; when you exchange UST for Luna, there is one less UST in the market.
In May 2022, many large holders began to sell UST, causing the price of Luna to plummet by over 90%, dropping to $10, and UST completely decoupled, falling to $0.6.
On May 12, Luna continued to plummet by 99%, nearly reaching zero, and UST's price fell below $0.2.
On May 13, many exchanges delisted Luna and suspended trading, and the Terra public chain went offline.
The LUNA black swan event marked a significant turning point in the cryptocurrency market, triggering a major crisis in the decentralized finance (DeFi) sector and having a profound impact on the market.
6. The FTX collapse incident
Finally, it must be said that the FTX incident that emerged at the end of 2022 truly shocked many cryptocurrency users.
FTX, as the second-ranked exchange in the cryptocurrency market at the time, received investments from institutions such as Sequoia, Temasek, and BlackRock, achieving a valuation of $32 billion in the primary market.
At the end of November 2022, it collapsed dramatically, with internal management in complete disarray, casually misappropriating client funds.
With the collapse of FTX, Binance further solidified its position as the top exchange.
The FTX collapse incident triggered a crisis of trust in the entire cryptocurrency market, severely impacting the market.
In 2022, affected by LUNA and FTX, the price of Bitcoin fell from around $60,000 to about $15,000, plummeting 75%.
