The rise and fall of Bitcoin, the world’s largest cryptocurrency, has been nothing short of dramatic. In December 2017, Bitcoin reached its all-time high, touching $20,000 per coin. However, the euphoria was short-lived, and in the following months, Bitcoin suffered a massive crash, losing more than 80% of its value. In this article, we will explain how much Bitcoin crashed and why.
The crash of Bitcoin began in late 2017 when the cryptocurrency was trading at an all-time high of around $20,000 per coin. At this point, many investors were jumping on the Bitcoin bandwagon, hoping to make quick profits. However, the market was overvalued, and many experts warned that the bubble would burst soon. In December 2017, the bubble finally burst, and Bitcoin began to crash.
By the end of 2018, Bitcoin had lost more than 80% of its value, dropping to around $3,000 per coin. The crash was not only limited to Bitcoin but also affected other cryptocurrencies, and the entire cryptocurrency market lost more than $700 billion in value.
There were several reasons for the crash of Bitcoin. Firstly, the market was overvalued, and many investors had unrealistic expectations of the cryptocurrency. Secondly, several countries, including China and South Korea, announced that they would be cracking down on cryptocurrency trading, which led to a drop in demand. Thirdly, there were several high-profile hacks and scams, such as the Mt. Gox hack, which eroded trust in the cryptocurrency market.
However, despite the crash, Bitcoin has managed to recover, and as of September 2021, it is trading at around $50,000 per coin. So, how did Bitcoin manage to recover from such a massive crash?
One reason for Bitcoin’s recovery is that it has become more mainstream. Several large companies, including Tesla and PayPal, have invested in Bitcoin, which has increased demand and driven up prices. Additionally, the pandemic has led to a surge in online transactions, which has increased the demand for cryptocurrencies.
Another reason for Bitcoin’s recovery is that the market has become more stable. The cryptocurrency market has matured, and regulations have been put in place to prevent fraud and scams. Additionally, several institutional investors, such as hedge funds and asset managers, have entered the market, which has increased stability and reduced volatility.
In conclusion, the crash of Bitcoin was a significant event that saw the cryptocurrency lose more than 80% of its value. However, the market has since recovered, and Bitcoin is now trading at around $50,000 per coin. The crash was caused by several factors, including an overvalued market, regulatory crackdowns, and high-profile hacks and scams. However, Bitcoin has managed to recover due to increased mainstream adoption, a more stable market, and increased institutional investment.