Know the 6 big falls of digital currencies; The biggest crashes in the crypto market

Contrary to the definition that usually comes from the attractive positive fluctuations of the crypto market, we have not seen any bloodbath in this market. Although the fall of digital currencies may not be to the taste of many users, this is the reality of the market. From the fall of Bitcoin from $69,000 to $15,000 to the collapse of Luna digital currency (LUNA) at $116, all have happened in these few short years of the market’s life.

Always behind more highs lurks more devastating falls. Learning from falls is one of the most important tips to reach the top. Join us in this article to explore the biggest crashes in the digital currency market together.

Fall of digital currencies; Why and how?

Using the word crash to define financial crises in the digital currency market does not always have the same meaning. Exactly why and how these falls are the main difference between them. A 50% drop in the price of a token is defined as a market crash, and the complete destruction of a digital currency is also defined with the same term.

The fall in the price of digital currencies can have various reasons. Sometimes, these crashes are due to news and market events and sometimes due to pre-planned mischief.

For example, the crash of the Bitconnect network was a premeditated mischief. This crash caused many investors to lose, and the losses have not yet been recovered.

In contrast, the fall in the price of Bitcoin from $69,000 to $15,000 per year was due to market conditions. At that time, factors such as the increase in interest rates in the United States and the economic recession in the world caused the value of digital currencies to decrease.

Fraud in the digital currency market is done in different ways. The lack of any monitoring of digital currencies has made us even witness new fraud initiatives in it. From the emergence of fraud and scam projects to Rug Pull, all of them can be the reason for the fall of digital currency.

The biggest cryptocurrency crash ever

Since the emergence of the digital currency market and the introduction of Bitcoin in 2009, various failed projects have appeared in this market. Tokens that, by collecting users and a lot of capital, swallowed them all like a black hole and are now in the trash of the digital currency market.

Along with these black holes, there are also powerful digital currencies that continue to work despite market crashes and there is no news of their destruction. If we were to list the biggest falls in the history of digital currencies, the following would probably stand out the most:

• Bitcoin falls from $1,127 to $360
• Bitcoin falls from $19,665 to $6,852
• The collapse of BitConnect
• Bitcoin falls from $69,000 to $19,000
• Collapse of Terra project
• FTX disaster

The digital currency market has always been full of challenges and financial crises, and every storm has been able to take this market in one direction or another. In order to avoid such injuries in the future, we will analyze each of these falls so that you can learn more about their causes.

1- Bitcoin fall from $1,127 to $360

To introduce one of the biggest cryptocurrency crashes, we travel back to 2014, where the cryptocurrency market wasn’t as hot as it is today. Most of you probably didn’t even have a basic knowledge of the digital currency market and Bitcoin in 2014, and you probably didn’t even think much about buying Bitcoin.

Investment in this market is not yet widespread and most of them were brokers and profiteers who used various sites and without the knowledge of users all over the world, to achieve huge profits.

In 2014, hackers took advantage of the inexperience of many companies developing digital currencies, and news about the hacking of various networks was heard again and again. Bitcoin, which had started a great upward trend since 2013 and passed the price of $1000, had raised the possibility of such scams.

As the largest digital currency exchange that year, Mt.Gox was responsible for managing 70% of the Bitcoin transaction volume. Imagine how much any disruption and sabotage to the Mt.Gox network could have affected Bitcoin and the cryptocurrency market. What happened of course.

It was in February 2014 that Mt.Gox noticed massive hacks and the destruction of its users’ assets. 740,000 bitcoins were stolen and 6% of the total bitcoins in circulation at that time were in the possession of hackers.

The Mt.Gox exchange failed to provide 460 million dollars of users’ capital, and the big shock occurred, reducing the price of Bitcoin from 1,127 dollars to 360 dollars. At the highest price so far, the value of stolen bitcoins reaches more than 50 billion dollars and still Mt.Gox has not managed to refund the lost funds.

Mt.Gox exchange failed to provide 460 million dollars of users’ capital. This big shock caused the price of Bitcoin to drop from $1,127 to $360. The value of stolen bitcoins at the highest price ceiling reaches more than 50 billion dollars. It should be noted that Mt.Gox has still not managed to refund the lost funds.

2- Bitcoin fall from $19,665 to $6,852

The journey of Bitcoin started in 2009 and reached 2018. Just a year ago, we also saw explosive growth in the market and Bitcoin went through a strange upward rally. The climbs, at least in that time frame, seemed strange to users and everyone was talking about bubbles. At that time, you would hardly find anyone who proposed an idea other than a bubble for Bitcoin.

The financial winter of 2018 suddenly dropped the price of Bitcoin by 70% to $6,852. Ethereum and other altcoins were not spared from this fall either. Of course, the reason for these falls was not very special news except traders’ fear of huge growth and big investors exiting the market. Something that may happen in the future.

3- Collapse of BitConnect

The third fall of digital currencies took place in 2018. Where a platform with a very strange claim raised a huge amount of capital and its destruction caused a lot of capital to be lost.

Everything about Bitconnect is similar to a Ponzi scheme, but at that time, all investors were focused on 40% profit every month, and even all the warnings about Bitconnect being a Ponzi were not taken into account.

The issue was that BitConnect, as a decentralized platform, had promised users a 40% profit for investing Bitcoin in its platform, and the profit from this investment was paid with the BCC token. This high attraction turned a huge flood of funds towards it. As far as Bitconnect with the capital of new users, it gave the profit of the previous investors.

This strange influx of capital into BitConnect caused the value of its native token to grow greatly. Then in 2018, when the bubble of this digital currency burst, we saw its price drop from 509 to 8 dollars. Little by little, there was no news about BitConnect as a valid digital currency. From the ashes of that project, nothing but a few memes are left in the market.

Bitconnect’s downfall began when security organizations pressured the platform to offer unreasonable profits. All the assets of the users were lost in the blink of an eye in this incident and the effects are still left for the investors.

4- Bitcoin fall from $69,000 to $19,000

One of the biggest falls in the digital currency market has to do with Bitcoin falling from its all-time high ($69,000) to $19,000 and even lower. The fall that started in November 2021 and after one year we saw a 70% drop in the price of Bitcoin.

The $69,000 Bitcoin became a legend instead of scaring users. Everyone was talking about $100,000 and even $1 million Bitcoin, and $69,000 prices didn’t seem that attractive. While Bitcoin reached this price in a big upward rally and a price correction was expected.

At that time, the market value of digital currencies was 3 trillion dollars, and after this fall, it reached below 1 trillion dollars. This sharp drop was considered as a big shock for the digital currency market and after nearly two years, this market value still hasn’t recovered.

5- Collapse of Terra project

We cannot talk about the fall of digital currencies without mentioning the Terra network. A digital currency that had a lot of hopes and the number of investors was increasing every day, but suddenly everything collapsed like rubble.

In 2022, one of the largest stablecoins in the world, which had been active for years, collapsed. The market was facing a big shock. On the one hand, stablecoin, which was supposed to protect the value of users’ property, was lost, and on the other hand, Luna digital currency was also going down the path at a high speed.

Trollbez decided to use all their 35 billion dollars capital to bring back the stablecoin Terra. But this issue did not arise and we witnessed one of the biggest falls in the digital currency market. Although we have seen various crashes in the cryptocurrency market before the Luna phenomenon, we have never seen such a crash in a stablecoin until then.

In an instant, both the Terra stablecoin and the Terra native token were wiped out with $45 billion in user capital. Three Arrows Capital (3AC), one of the largest cryptocurrency hedge funds, declared bankruptcy, and more than $2.8 billion of user assets were lost in the fund.

The domino of bankruptcies continued. In the next step, it was the turn of Celsius digital currency loan fund to declare bankruptcy with a deficit of 1.9 billion dollars. The loss of more than $500 billion in assets in the Terra stablecoin caused widespread damage to the market, and the financial damage was not limited to direct Terra investors.

6- FTX disaster

Another major disaster witnessed by the digital currency market was the FTX exchange disaster. In 2022, this exchange was known as one of the largest exchanges in the world and there was a significant volume of transactions on it; Until we saw challenges between Zhang Peng Zhao (CZ), CEO of Binance and Sam Bankman-Fried, CEO of FTX.

The matter started here when the CEO of Binance transferred his shares in the FTX exchange to Sam Bankman Farid and received a significant part of the value of his shares with the native token of this exchange, FTT.

In November 2022, according to a report published by CoinDesk (CoinDesk), it was discovered that the hedge fund managed by Sam Benkman Farid, known as Alameda Research, has an unusual amount of FTT tokens; The report that followed Zhao’s reactions and caused him to sell all his tokens. This event created a huge fear in the FTX community and caused the sales volume of 6 billion dollars to be recorded within 3 days.

This high volume of sales challenged the FTX exchange and its native token had a huge price drop from $85 to below $1. Following that, two lending companies, Genesis Trading and BlockFi, also declared bankruptcy.

One of the main effects of this event was the significant drop in the price of Solana digital currency. A significant part of the assets of the FTT exchange and Alameda Research was Solana. Following this incident, the price of Solana fell sharply and reached below 10 dollars. This price drop even caused the price of bitcoin and ethereum to fall and finally marked a major financial crisis in the digital currency market.

final word

In this article, we tried to introduce you to the biggest financial crises and the fall of digital currencies in the history of this market. Events that each were very unlikely to happen before, but now the digital currency market has passed all of them and continues on its way.

Perhaps, with high experience and high accuracy, Bitconnect’s Ponzi could have been predicted. But the destruction of the Terra network with that level of attraction and programs or the collapse of one of the largest exchanges in the world was not so easy.

This shows that anything can happen in the digital currency market and we should not ignore these possibilities in this market. In all financial disasters and crises, many users lost their assets. But many have also passed through these crises and are currently continuing to be profitable in the market.

Investing in the digital currency market has many attractions and it is added to these attractions every day. But reviewing such events makes us enter into the investment process in this market with more caution. Let’s not forget that investing is an important knowledge and we are not going to make a significant fortune in the digital currency market by just buying a few digital currencies without any planning and knowledge.