In this article, I will discuss the Biggest Bitcoin Crashes in History, identifying specific incidents that instigated significant drops in price and subsequent market panic.
These crashes demonstrate the mercurial character of Bitcoin, starting from exchange hacks to regulatory crackdowns and economic turmoil.
For anyone looking to invest or follow closely to the crypto space, understanding these moments is important.
key Points & Biggest Bitcoin Crashes In History List
| Event | Key Point / Market Impact |
|---|---|
| Mt. Gox Collapse (2014) | Major Bitcoin exchange hack; 850,000 BTC lost; trust in crypto shaken |
| China Bans Financial Institutions from Bitcoin (2013) | Early regulatory threat; led to sharp Bitcoin price drop |
| Bitcoinica Hack Crash (2012) | Loss of ~18,500 BTC; highlighted exchange security issues |
| Bitfloor Hack Crash (2012) | Exchange shut down after losing 24,000 BTC; early sign of crypto risk |
| Silk Road Shutdown (2013) | FBI seizes BTC; fear over Bitcoin’s association with illegal activity |
| China ICO Ban Crash (2017) | China bans ICOs and shuts down exchanges; massive altcoin drop |
| South Korea Regulation Fears (2018) | Market panic over potential South Korea crypto trading ban |
| 2018 Bear Market Crash | Prolonged crypto downturn; Bitcoin dropped ~80% from ATH |
| COVID-19 Pandemic Crash (March 2020) | Global market panic; Bitcoin plunged ~50% in days |
| BitMEX CFTC Charges (October 2020) | Legal trouble for major exchange; highlighted regulatory risks |
| Elon Musk Tesla Announcement Crash (May 2021) | Tesla stops accepting BTC due to environmental concerns; prices fall sharply |
| China Mining Ban Crash (June 2021) | Bitcoin hash rate plunged; miners forced to relocate |
| Evergrande Market Scare (September 2021) | China’s real estate crisis sparked global selloff, affecting crypto |
| U.S. Infrastructure Bill Tax Fears (November 2021) | Concerns over crypto tax reporting provisions in the bill |
| Fed Tapering Announcement (January 2022) | Tightening monetary policy triggered crypto and stock sell-offs |
| Terra/LUNA Collapse (May 2022) | $60B ecosystem wiped out; trust in algorithmic stablecoins destroyed |
| Celsius Network Freeze (June 2022) | Withdrawals halted; users lost access to funds; sparked contagion fears |
| Three Arrows Capital (3AC) Collapse (June 2022) | Major hedge fund collapse; deepened crypto credit crisis |
| FTX Bankruptcy Crash (November 2022) | One of largest crypto exchanges collapsed; market-wide devastation |
| SEC Crackdowns on Crypto Exchanges (2023) | Increased regulatory pressure on Coinbase, Binance, etc.; ongoing market uncertainty |
20 Biggest Bitcoin Crashes in History
1.Mt. Gox Collapse (2014)
In 2014, Bitcoin’s largest exchange was Gox, but it collapsed when hackers stolen 850,000 BTC, which was valued at over $450 million back then. Panic ensued, prices crashed, and investors were deep in the crisis.
The exposed serious flaws in the exchange’s security and transparency. Markedly the exposed flaws diminished investor trust. The Gox incident crumbled the whole Bitcoin system and centralized regulatory control, bringing lasting consequences on the posterity.
Meanwhile authorities enforced tighter policies. Even in current times, the impacts Gox had are vary relevant. It’s an event known terribly globally in the crypto industry.
| Feature | Details |
|---|---|
| Event | Mt. Gox Collapse |
| Year | 2014 |
| Cause | Theft of 850,000 BTC from the exchange |
| Impact on BTC Price | Dropped from ~$850 to under $400 |
| Key Takeaway | Triggered distrust in centralized exchanges; pushed demand for regulation |
2.China Bans Financial Institutions from Bitcoin (2013)
In December 2013, the People’s Bank of China (PBC) issued a directive that financial institutions were to cease all dealings with Bitcoin, initiating one of Bitcoin’s first major regulatory shocks. Before this, China had been a flourishing market for cryptocurrencies.
This order resulted in Bitcoin’s price steeply plummeting to approximately \$500, a loss of over \$1,000, and in the process erasing months worth of gains. This led to global fears of how government regulations could undermine cryptocurrencies’ promise of decentralization.
It demonstrates how the ecosystem was susceptible to national policies, considering the country’s control over the bitcoin frameworks. This also anticipated China’s relentless prohibitions on the crypto arena in the subsequent years.
| Feature | Details |
|---|---|
| Event | China Bans Financial Institutions from Bitcoin |
| Year | 2013 |
| Cause | Regulatory move to stop banks from handling BTC |
| Impact on BTC Price | Fell from ~$1,000 to ~$500 |
| Key Takeaway | Highlighted regulatory risks in large markets |
3.Bitcoinica Hack Crash (2012)
Bitcoinica accrued a staggering $60,000 BTC loss through numerous hacks, with the most significant occurring in 2012. The first being in March and then followed by another in May, the Bitcoin community regarded these as catastrophic losses.
Bitcoinica’s Bitcoin exchange and margin trading platform was still in its incipient stages and hardly any trust was placed on exchanges. These hacks played a critical role Bitcoin’s betokened control of maintaining ownership.
The tumble in price served as an epitome hoopla surrounding claims of currency frameworks where the assets are bound to serve more than one purpose and showcase numerous uses.
| Feature | Details |
|---|---|
| Event | Bitcoinica Hack |
| Year | 2012 |
| Cause | Exchange hacked; loss of 60,000+ BTC |
| Impact on BTC Price | Price fell; shook early investor confidence |
| Key Takeaway | Emphasized poor security practices in early platforms |
4.Bitfloor Hack Crash (2012)
In September of 2012, Bitfloor, a US-based Bitcoin exchange, suffered a hack in which cybercriminals stole approximately 24,000 BTC (Bitcoins), worth around $250,000 during that time. The hack led to the suspension of the exchange and users were locked out of their funds.
Although smaller in scale than later hacks, this incident greatly affected the market due to the limited number of active exchanges at this point in time.
It showcased the weak infrastructure of keeping private keys unencrypted and underscored the need for better corporate cybersecurity policy. Bitcoin Investor trust was negatively impacted, and this incident was partially responsible for another steep plunge in Bitcoin’s already volatile price.
| Feature | Details |
|---|---|
| Event | Bitfloor Hack |
| Year | 2012 |
| Cause | 24,000 BTC stolen from exchange |
| Impact on BTC Price | Market dipped due to low exchange liquidity |
| Key Takeaway | Reinforced need for secure key storage and exchange oversight |
5.Silk Road Shutdown (2013)
In October of 2013, the FBI shut down Silk Road, a darknet market which operated primarily on Bitcoin, with Ulbricht as its active operator. Ross Ulbricht, the alleged operator of the marketplace, was arrested and along with him, over 170,000 BTC were also seized.
The impact ignited concerns that Bitcoin’s status would be permanently stuck alongside illicit activities and would face an everlasting governmental veto. Following the news, Bitcoin’s market value drastically dropped by over 20% within a few days.
This decline signified fears associated with Bitcoin’s reputation as a currency for crimes and substantial legal consequences. Surprisingly, the market bounced back and this incident weakened the grip of Bitcoin’s illegal dealings, ironically paving the way for its future credibility.
| Feature | Details |
|---|---|
| Event | Silk Road Shutdown |
| Year | 2013 |
| Cause | FBI shut down dark web marketplace using BTC |
| Impact on BTC Price | Fell over 20% quickly |
| Key Takeaway | Raised concerns over BTC’s criminal usage and legal scrutiny |
6.China ICO Ban Crash (2017)
The action triggered another sell-off in Bitcoin and altcoin markets when China outright banned ICOs and asked all domestic crypto exchanges to stop operating. This development came in September 2017. Bitcoin’s price plummeted from just above \$5,000 to below \$3,000 for a couple of weeks post the decision.
China’s ICO ban single handedly fueled a speculative bubble ICOs had built up, Bitcoin’s price devastation led to capital outflow from Chinese ICO’s bankrupting bitcoin exchanges. China’s move drew international attention and surveillance by other governments looking into crypto regulations.
This crash turned out to be a catch-22 for many promising projects that were forced to reconsider their compliance and legal standing. It also brought to the forefront the sensitivity of crypto markets to regulatory interventions from major world economies.
| Feature | Details |
|---|---|
| Event | China ICO Ban |
| Year | 2017 |
| Cause | Ban on ICOs and crypto exchanges |
| Impact on BTC Price | Fell from ~$5,000 to ~$3,000 |
| Key Takeaway | Showed market fragility to harsh regulation |
7.South Korea Regulation Fears (2018)
Cryptocurrency has been a massive market for South Korea, so the news that they were looking into banning trading in early 2018 certainly sparked a lot of attention.
Bitcoin trading was very volatile back then so the rumors triggered panic selling, Bitcoin traded reached the price of 17000 and then dropped to under 10000almost over night.
The level of investment people put into trading in South Korea is much higher than the global average, so if such policies were introduced there would be a significant impact to the market.
Even though there was no absolute ban, the disturbance was sufficient to fuel volatility and deepen the ongoing downturn.
This event emphasized how severely sensitive crypto trading and trading based currencies are to news regarding regulations and how in sensitive retail crypto trading nations, government policies play a huge role in determining the market value.
| Feature | Details |
|---|---|
| Event | South Korea Regulation Fears |
| Year | 2018 |
| Cause | Rumors of potential crypto ban |
| Impact on BTC Price | Dropped from ~$17,000 to under ~$10,000 |
| Key Takeaway | Highlighted how rumors alone can fuel volatility |
8.2018 Bear Market Crash
Bitcoin price saw considerable growth as investors bought Bitcoin due to market psychology hype in 2017 which made Bitcoin reach near 20,000 in December during the peak season). This unsteady investment led to speculative bubbles around cryptocurrency.
However, Bitcoin started to decline post reaching the peak, which led to a dip in his price in 2018 price due to a burst in the speculation bubble ICOs, regulatory confusion, and evaporating attention from the media.
Downward bound 2018 started with its Korea cup BTC price sees-sawing, suppressing Bitcoin’s price depreciated by more than 80% until it stabilized at $3200 dropping center tethering all coins to substancial losses where they Identify as a coin acorns having been slice to unbeatable amount of his 90% of coins where value turning null fast became Bitcoin Bitcoin required over the determining the mark a win billion dollar rally cap mark.
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| Feature | Details |
|---|---|
| Event | 2018 Bear Market |
| Year | 2018 |
| Cause | ICO bubble burst; regulatory pressure |
| Impact on BTC Price | Dropped from ~$20,000 to ~$3,200 |
| Key Takeaway | Major market correction; shifted focus to real utility and tech |
9.COVID-19 Pandemic Crash (March 2020)
In March 2020, as the COVID-19 pandemic triggered a global financial crisis, Bitcoin crashed alongside traditional markets. Within two days, its price plummeted by nearly 50%, falling from $9,000 to below $5,000.
Investors rushed to liquidate assets for cash amid uncertainty and economic fear. The “Black Thursday” crash exposed Bitcoin’s correlation with risk assets during times of crisis, challenging its “safe haven” narrative.
However, the market recovered strongly in the following months, driven by institutional adoption and economic stimulus. The event was a key moment in Bitcoin’s maturity, showing both its vulnerabilities and long-term resilience under macroeconomic stress.
| Feature | Details |
|---|---|
| Event | COVID-19 Crash |
| Year | 2020 |
| Cause | Global market panic and liquidity crisis |
| Impact on BTC Price | Dropped 50% in two days (from ~$9,000 to ~$4,500) |
| Key Takeaway | Bitcoin behaves like a risk asset in macro panics |
10.BitMEX CFTC Charges (October 2020)
The CFTC has set its sights on BitMEX, one of the largest crypto derivatives platforms, accusing them of not being compliant with basic norms such as having an operating license, as well as having no anti-money laundering procedures in place. The leaders got arrested, and investors did not wait too long to capitalize, withdrawing their money from the platform.
The price of Bitcoin plunged because of the anticipation of new restrictions and enforcement policies. The scenario captured the increasing attention and concern from U.S. regulators towards unregulated exchanges and their associated risks.
It also marked the moment where legal accountability became necessary for the industry, forcing many platforms to improve revenue collection procedures (compliance) along with KYC.
| Feature | Details |
|---|---|
| Event | BitMEX CFTC Charges |
| Year | 2020 |
| Cause | U.S. charges for unregulated trading and AML failures |
| Impact on BTC Price | Immediate dip in price |
| Key Takeaway | Showed increasing regulatory enforcement on crypto platforms |
11.Elon Musk Tesla Announcement Crash (May 2021)
In May 2021, Bitcoin’s price fell when Tesla stopped accepting Bitcoin as a payment method for their cars due to Musk’s concern about Bitcoin mining’s environmental impact.
Most crypto experts believe that this shift Tesla made in policy was influenced by Tweets Musk made in previous months. Aside from the multi-billion dollar investment Musk made over a few months, marketing experts began debating the value of brand reputation.
The plunge in Bitcoin’s price from 55,000 to 35,000 within days served as proof how deeply market leaders can shift commodity prices with a single tweet.
His remarks also helped advance discussion about Bitcoin’s environmental concerns. It changed the focus of investors from Ethereum 2.0 and proof of stake cryptos to the Ethereum neck area.
| Feature | Details |
|---|---|
| Event | Tesla Stops Accepting BTC |
| Year | 2021 |
| Cause | Environmental concerns over BTC mining |
| Impact on BTC Price | Dropped from ~$55,000 to ~$35,000 |
| Key Takeaway | One tweet can shake the entire market |
12.China Mining Ban Crash (June 2021)
In June 2021 Bitcoin’s price had been consistently above USD 40,000 up until the ninth when China announced it would ban Bitcoin mining in several provinces due to environmental and economic concerns. This ban alone eliminated more than 50% of the global Bitcoin hash rate.
As with everything else, Bitcoin’s price suffered due to this operational uncertainty, causing Bitcoin’s price to tumble to around USD 30,000.
The extreme surge in miners moving to friendlier terrain further compounded this mark. Ultimately, this showcased Bitcoin’s dependence on Chinese infrastructure, prompting immediate debate on Bitcoin’s energy consumption.
| Feature | Details |
|---|---|
| Event | China Bitcoin Mining Ban |
| Year | 2021 |
| Cause | Government orders mining shutdown |
| Impact on BTC Price | Fell from ~$40,000 to ~$30,000 |
| Key Takeaway | Mining power shifts globally; decentralization increases |
13.Evergrande Market Scare (September 2021)
A major fear regarding the Chinese real estate conglomerate Evergrande defaulting on its multi-million dollar debt during September 2021 sent a shockwave through the global market, as it had the potential to start a financial crisis.
In addition, it crippled the crypto market too, Bitcoin crashed in price with it falling from $48,000 to under 41,000. Although crypto was not directly related, the panic showed how intertwined the traditional market fears are with assets such as Bitcoin.
As a result, crypto and other economically sensitive assets were sold off in bid to counter economic recession. The incident underlined Bitcoin’s responsiveness to global economic factors along with the degree of negative sentiment in the crypto market caused by uncertainty in the economy.
| Feature | Details |
|---|---|
| Event | Evergrande Debt Crisis |
| Year | 2021 |
| Cause | Chinese real estate default fears |
| Impact on BTC Price | Dropped ~$7,000 in days |
| Key Takeaway | Bitcoin increasingly tied to global macroeconomic events |
14.U.S. Infrastructure Bill Tax Fears (November 2021)
In November of 2021, the U.S. implemented an infrastructure bill with rather vague crypto tax reporting guidelines. It broad lled categorized a lot of crypto constituents, including miners and developers as traders, which meant that they would have to comply with burdensome reporting requirements.
Such lack of clarity caused Bitcoin’s value to plummet from its all-time highs of \$69,000 to under \$60,000. The increase in scope for surveillance combined with taxation were perceived to dampen participation as well as stifle innovation within the U.S. crypto sector.
Although the bill did not impose a ban, it drew significant long-term regulatory concerns which raised anxiety for investors. Furthermore, it triggered activism in the political domain of the crypto sphere, which rallyed behind the campaign for friendly policies.
| Feature | Details |
|---|---|
| Event | U.S. Infrastructure Bill |
| Year | 2021 |
| Cause | Confusing crypto tax language |
| Impact on BTC Price | Decline from ~$69,000 peak |
| Key Takeaway | Regulatory ambiguity hurts investor confidence |
15.Fed Tapering Announcement (January 2022)
The U.S. Federal Reserve declared an intention to taper asset purchases and increase interest rates in January 2022, citing inflation concerns. This change in monetary policy diminished the liquidity in financial markets which led to sweeping selloffs in risk assets such as Bitcoin.
The already fatigued crypto market suffered further with Bitcoin crashing from over \$46,000 to under \$35,000. This announcement signified the end of a stimulus induced bull run and signaled the start of a tightening cycle.
It also emphasized Bitcoin’s increased sensitivity to macroeconomic changes and contested the narrative of Bitcoin functioning as a hedge against inflation during traditional financial market downturns.
| Feature | Details |
|---|---|
| Event | Fed Tapering Begins |
| Year | 2022 |
| Cause | Rising rates and end of loose monetary policy |
| Impact on BTC Price | Fell below $35,000 |
| Key Takeaway | Bitcoin sensitive to traditional economic tightening |
16.Terra/LUNA Collapse (May 2022)
The Terra ecosystem suffered a massive collapse in May 2022. This happened when its algorithmic stablecoin, UST, lost its peg to the US dollar. As panic began to spread, the sister token, LUNA, hyperinflated and collapsed from over \$80 to near \$0 in just days.
This hyperinflation wiped out more than \$60 billion. Bitcoin came under pressure as the Luna Foundation Guard sold off BTC reserves to try to restore the UST peg, claiming they would defend it. This shift contributed to broader market panic.
The crash eroded confidence in algorithmic stablecoins and sparked global regulatory scrutiny. Additionally, this marks the beginning of the crypto market downfall, triggering widespread market contagion.
| Feature | Details |
|---|---|
| Event | Terra/LUNA Collapse |
| Year | 2022 |
| Cause | UST lost dollar peg; LUNA hyperinflated |
| Impact on BTC Price | Contributed to drop from ~$40,000 to ~$30,000 |
| Key Takeaway | Algorithmic stablecoins pose systemic risk |
17.Celsius Network Freeze (June 2022)
In June of 2022, the crypto lending platform Celsius Network ceased all withdrawals and transfers due to “extreme market conditions.” This led to a liquidity crisis, trapping billions in user funds. Celsius was making risky bets with customer assets, and its collapse exposed the problems in the lending model.
Coupled with the Terra crash, Bitcoin’s price plummeted from over \$30,000 to around \$20,000. This triggered the fear of broader insolvency throughout centralized finance (CeFi) platforms.
Moreover, it marked a turning point when trust was lost, where users started questioning the safety of centralized services and led to a shift back towards decentralization and self-custody of crypto.
| Feature | Details |
|---|---|
| Event | Celsius Halts Withdrawals |
| Year | 2022 |
| Cause | Liquidity crisis from risky lending |
| Impact on BTC Price | Fell toward $20,000 |
| Key Takeaway | CeFi platforms face collapse from mismanagement |
18.Three Arrows Capital (3AC) Collapse (June 2022)
The crypto hedge fund, Three Arrows Capital (3AC), crumbled in June 2022 after not making their margin calls. 3AC defaulted on billions of loans due to the collapse of Terra and other assets, resulting in a domino effect throughout the cryptocurrency industry.
This further contributed to Voyager and BlockFi’s collapse. The value of Bitcoin reached a new low, plummeting below $20,000.
This crisis highlighted the exploitative lending practices and their intricate web within the crypto lending ecosystem while also showcasing the degree of leverage abuse the system can withstand.
Furthermore, the collapse of 3AC intensified the ever-growing need for transparency, risk mitigation, and orderly control in investment platforms and firms dealing in crypto.
| Feature | Details |
|---|---|
| Event | 3AC Collapse |
| Year | 2022 |
| Cause | Overleverage and exposure to failing assets |
| Impact on BTC Price | Continued pressure on $20K support |
| Key Takeaway | Contagion risk is real in crypto lending space |
19.FTX Bankruptcy Crash (November 2022)
FTX, one of the most prominent and reputable crypto exchanges, filed for bankruptcy in November 2022 after purportedly engaging in fraudulent activities and misappropriating customer funds.
The exchange’s downfall caused a catastrophic crash in the cryptocurrency markets, plummeting Bitcoin’s value from \$21,000 to less than \$16,000. The founder of FTX, Sam Bankman-Fried, was fraudulently charged, ruining the reputation of the industry.
This collapse undermined user trust in the market, resulted in billions of dollars in losses, and triggered regulations across the globe. This greatly impacted the timeline of crypto, demonstrating that even well-established companies can decline while warranting the need for more transparency within the system.
| Feature | Description |
|---|---|
| Date | November 2022 |
| Trigger | FTX insolvency and fraud revelation |
| Impact on BTC | Dropped to ~$15,000 |
| Market Reaction | Extreme panic and withdrawal from exchanges |
| Key Lesson | Centralized exchanges must be transparent |
20.SEC Crackdowns on Crypto Exchanges (2023)
The U.S. Securities and Exchange Commission (SEC) escalated their enforcement actions on crypto exchanges like Binance and Coinbase throughout 2023. These businesses were accused of offering unregistered securities, failing to uphold U.S. laws, and mismanaging customer assets.
Such litigation only increased market volatility and diminished trading volume. Bitcoin suffered falls from time to time as regulatory scrutiny escalated — there was no escaping fears of enforced delistings and tighter controls.
The SEC’s actions indicated increased regulatory control over the crypto industry within the U.S. Even if the pressure was not the sole reason for a crash, this sustained intervention softened market mood and fueled sentiment that the industry needs to adjust to enforced laws.
| Feature | Description |
|---|---|
| Date | Ongoing through 2023 |
| Trigger | SEC lawsuits against Coinbase, Binance, others |
| Impact on BTC | Periodic declines due to legal uncertainty |
| Market Reaction | Reduced trading volume, delistings |
| Key Lesson | Regulatory clarity is essential for U.S. crypto progress |
Conclusion
To sum up, Bitcoin’s most significant crashes showcase the market’s vulnerability to hacks, regulation, macroeconomic changes, and prominent personalities.
Each significant decline in value revealed failing security protocols of exchanges, incomplete projects, poor policies, and insecure communiques.
Failure to maintain a stable macroeconomic climate; nonetheless, Bitcoin has continuously managed to recover which underscores its strength while underscoring that there needs to be more caution with investing, regulation, and infrastructure within crypto.
