If you bought Bitcoin in December 2017 before the latest price crash, you may be suffering from fear, uncertainty and doubt (FUD). However, it may well be comforting to hear that Bitcoin has suffered many such price crashes in its short history. In that sense, the latest dip is nothing new (it’s not even the biggest crash in the history of Bitcoin). Just take a look at the biggest price crashes in Bitcoin history and you’ll likely feel happier to hold long-term.
Mt. Gox is hacked
June – November 2011: 94%
Bitcoin was launched in 2009 and, at that time, wasn’t traded on any exchanges. Its first recorded price was just a few cents per bitcoin in 2010. But by June 2011, one bitcoin was worth $32. However, a hack of the Mt. Gox Bitcoin exchange saw Bitcoin’s price fall. What followed was a long bear market that saw the price of a bitcoin hit rock bottom at just $2 by November 2011. This 94% reduction in price makes this the biggest Bitcoin price crash in history to date.
Mt. Gox suspends trading
April 2013: 79%
By early 2013, Bitcoin prices had reached double that of the 2012 high. However, Mt. Gox would once again have something to say about that. At the time, Mt. Gox was the world’s largest Bitcoin exchange. Unable to cope with rapidly increasing demand, Mt. Gox suspended trading from 11-12 April. Until the exchange issued a press release, many had thought that it had been the victim of a DDoS attack which had caused panic selling as Bitcoin’s price plummeted 79% from $266 to $54. However, it quickly recovered some days later.
Mt. Gox collapses
February 2014: 49%
February 2014 was the third and final time that Mt. Gox was to negatively impact Bitcoin’s price. Indeed, it was to be the last significant Bitcoin price crash for over three years. The Japan-based Bitcoin exchange collapsed and halted withdrawals following a hack that resulted in the loss of some 850,000 bitcoin. This resulted in Bitcoin’s price falling 49% from $867 to $439.
Investors doubt Bitcoin
June – July 2017: 36%
There was something of a summer sell-off in 2017 as the value of Bitcoin fell 36%. Having reached almost $3,000 in mid-June, it had fallen back to a little under $1,900 by mid-July. This time there was no huge exchange hack or collapse to blame. Instead, it was down to Bitcoin’s own failings. Specifically, it had become far too slow and expensive in comparison to other cryptocurrencies. The prospect of a fork did little to ease investor concerns.
Rumours of China ban
September 2017: 40%
Following the collapse of Mt. Gox in 2014, Bitcoin experienced a long period of recovery. It wasn’t until 2017 that the cryptocurrency market truly took off as Bitcoin’s price rose from a little under $1000 in January 2017 to $5000 by September 2017. A crackdown from China on Initial Coin Offerings (ICOs) led to widespread rumours that a China cryptocurrency ban was to follow. The price of a bitcoin fell 40% from $5000 to under $3000. Luckily, there has been no such ban and the price rallied to a new all-time high shortly after.
Rumors of South Korea ban
January – February 2018: 68%
Bitcoin and cryptocurrency as a whole soared following the end of the China FUD. By December 17, Bitcoin had reached an incredible all-time high of $20,000. However, January saw more uncertainty as rumours spread over a possible trading ban in South Korea. This resulted in the price falling 68% to around $6000. Clarification from South Korea’s Finance Minister that the country did not plan to ban cryptocurrency has seen Bitcoin recover somewhat, reaching a price of $9,000 by mid-February.
As you can see, there have been a number of significant price crashes in Bitcoin’s history, and one recently. Each time, Bitcoin has rallied to new all-time highs. Of course, this doesn’t guarantee the future of Bitcoin. However, it should go some way to easing any doubts you may have.
Have you held Bitcoin during Bitcoin’s biggest price crashes? Do you have any tips for holding during tough times? Let us know in the comments below!