In February 2011, the price ofBitcoin rose toUS$1.06, then fell toUS$0.67 that April. This spike was encouraged by severalSlashdot posts about it.[1] In June 2011, Bitcoin's price again rose, toUS$29.58. This came after attention from aGawker article about the dark web marketSilk Road. The price then fell toUS$2.14 that November.[1]
The 2018 cryptocurrency crash[3][4][5][6][7] (also known as the Bitcoin crash[8] and the Great crypto crash[9]) was the sell-off of mostcryptocurrencies starting in January 2018. After an unprecedented boom in 2017, the price of Bitcoin fell by about 65% from 6 January to 6 February 2018. Subsequently, nearly all other cryptocurrencies followed Bitcoin's crash. By September 2018, cryptocurrencies collapsed 80% from their peak in January 2018, making the 2018 cryptocurrency crash worse than thedot-com bubble's 78% collapse.[9] By 26 November, Bitcoin also fell by 80% from its peak, having lost almost one-third of its value in the previous week.[10]
A January 2018 article by CBS cautioned about possiblefraud, citing the case ofBitConnect, a British company which received acease-and-desist order from theTexas State Securities Board.BitConnect had promised very high monthly returns but had not registered with state securities regulators or given their office address.[11]
In November 2018, the total current value for Bitcoin fell below $100 billion for the first time since October 2017,[12][13] and the price of Bitcoin fell below $4,000, representing an 80 percent decline from its peak the previous January.[10] Bitcoin reached a low of around $3,100 in December 2018.[14][15]
17 December 2017: Bitcoin's price briefly reaches a new all-time high of $19,783.06.[16]
22 December 2017: Bitcoin falls below $11,000, a fall of 45% from its peak.[17]
12 January 2018: Amidst rumors that South Korea could be preparing to ban trading in cryptocurrency, the price of Bitcoin depreciates by 12 percent.[18][19]
26 January 2018:Coincheck, Japan's largestcryptocurrencyOTC market, is hacked. US$530 million of the NEM are stolen by the hacker, causing Coincheck to indefinitely suspend trading. The loss is the largest ever so far by an incident of theft.[20]
15 November 2018: Bitcoin's total current value falls below $100 billion for the first time since October 2017 and the price of Bitcoin falls to $5,500.[22][13]
Wired noted in 2017 that the bubble ininitial coin offerings (ICOs) was about to burst.[23] Some investors bought ICOs in hopes of participating in the financial gains similar to those enjoyed by early Bitcoin or Ethereum speculators.[24]
In June 2018, Ella Zhang of Binance Labs, a division of the cryptocurrency exchangeBinance, stated that she was hoping to see the bubble in ICOs collapse. She promised to help "fight scams and shit coins".[25]
From 8 to 12 March 2020, the price of Bitcoin fell by 30 percent from $8,901 to $6,206.[26] By October 2020, Bitcoin was trading for approximately $13,200.[27] In November 2020, Bitcoin again surpassed its previous all-time high of over $19,000.[28]
In early 2021, Bitcoin's price fluctuated wildly,[29] rising to $34,792.47 on 3 January 2021 before crashing by 17 percent the next day[30] and reaching above $40,000 for the first time on 7 January. On 11 January, the UKFinancial Conduct Authority warned investors against lending or investments in cryptoassets, that they should be prepared "to lose all their money".[31] On 16 February, Bitcoin reached $50,000 for the first time.[32] On 13 March, Bitcoin surpassed $61,000 for the first time.[33] Following a smaller correction in February, Bitcoin plunged from its peak above $64,000 on 14 April to below $49,000 on 23 April, representing a 23% mini-crash in less than 10 days, dipping below the March bottom trading range and wiping half a trillion dollars from the combined crypto total current value.[34]
On 14 April,Coinbase, a much hyped crypto exchange, went public on theNASDAQ. Their shares grew by over 31% on their first day to $328.28, pushing their market cap to $85.8B.[35]
Other cryptocurrencies' prices also sharply rose, then followed by losses of value during this period. In May 2021, the value ofDogecoin, originally created as a joke, increased to 20,000% of value in one year.[36] It then dropped by 93% shortly after.[37]
By 19 May, Bitcoin had dropped in value by 30% to $31,000,Ethereum by 40%, and Dogecoin by 45%. Nearly all cryptocurrencies were down by double-digit percentages.[38] Major cryptocurrency exchange Binance went down amid a market-wide price crash and traders are now seeking justice for their losses.[39] This was partly in response toElon Musk's announcement thatTesla would suspend payments using the Bitcoin network due to environmental concerns, along with an announcement from thePeople's Bank of China reiterating that digital currencies cannot be used for payments.[38]
Bitcoin and other cryptocurrencies experienced a solid recovery afterElon Musk met with leadingBitcoin mining companies to develop more sustainable and efficient Bitcoin mining.[40] After bottoming out on 19 July, by early September Bitcoin had reached $52,633.54 while Ethereum grew by over 100% to $3,952.13. After a short but significant fall, both cryptos peaked on 7 November 2021 at $67,566.83 and $4,812.09, respectively. The NASDAQ would peak 12 days later on 19 November at 16,057.44.
In September, Bitcoin officially became legal tender inEl Salvador with many news sources wondering what countries would be next.[41]
As of October 2021, China has continued shutting down crypto trading and mining activities.
As of October 2024, Tesla has not yet resumed payment with Bitcoin, although they do accept payment with Dogecoin on select items.[42]
After its peak, the crypto market began to fall with the rest of the market. By the end of 2021, Bitcoin had fallen nearly 30% from its peak down to $47,686.81, andEthereum had fallen about 23% to $3,769.70. In December 2022,The Washington Post reported that there was "the sense that the crypto bubble has definitively popped, taking with it billions of dollars of investments made by regular people, pension funds, venture capitalists, and traditional companies".[43]
2022–24 timeline
Date
Event
13 February 2022
Four crypto agencies purchaseSuper Bowl ads: Coinbase,FTX,eToro, andCrypto.com. Coinbase becomes one of the most downloaded apps after their ad airs.[44]
Bitmex becomes the first crypto agency to announce layoffs, laying off 25% of its workers.[46]
3 May
The Federal Reserve raises interest rates by 0.5%, triggering a broad market selloff.[47] Over eight days, Bitcoin falls 27% to just over $29,000, while Ethereum falls 33.5% to around $1,960. TheNASDAQ falls 12.5% during the following five days after the announcement.
10 May
Coinbase, with shares down nearly 80% from their peak, announces that if they went bankrupt people would lose their funds. The CEO later announces that they were at no risk of bankruptcy.[48]
5-13 May
TerraUSD and Luna, two stablecoins run byTerra, lose their pegs to the US Dollar and collapse, with the former being worth $0.10 and the latter nearly nothing.[49]
12 June
Celsius Network, a crypto exchange, announces the halt of all withdrawals and transfers.[50] Bitcoin falls 15% the following day to nearly $22,500, while Ethereum falls to $1,200. A wave of layoffs from other crypto agencies accompanies this, including from Crypto.com and Coinbase.[46]
Bitcoin dips below $20,000 for the first time since December 2020, and Ethereum falls below $1,000 for the first time since January 2021.
Babel Finance, a crypto lender based inHong Kong, freezes withdrawals.[52]
23 June
CoinFlex pauses withdrawals after a counterparty, which it later named asRoger Ver, experienced liquidity issues and failed to repay a $47 million stablecoin margin call.[53]
Both Genesis Global Trading andGemini halt withdrawals.[78]
28 November
BlockFi declares bankruptcy, citing exposure to FTX as the main cause.[79]
20 January 2023
Genesis files for Chapter 11 bankruptcy from exposure to FTX.[80]
12 February 2023
Following the collapse of several big exchanges, no crypto agency purchased a Super Bowl ad.[81]
2 March 2023
Shares inSilvergate Capital, an influential banker to the cryptocurrency industry, plunge 57.7% after the group said in a filing with theSEC that it would not be able to submit its annual10-K report in time.[82][83]
7 March 2023
The SEC freezes BKCoin transactions and accuses it of being a fraud after they raised $100M.[84]
8–9 March 2023
Silvergate Capital announces plans to liquidate its bank.[85][86]
New Zealand–based ethical travel company We Are Bamboo loses millions of dollars on cryptocurrency trading before announcing it was folding and would not be refunding hundreds of customers for their prepaid trips, according to a report from liquidatorsBDO.[89]
15 August 2023
Auckland-based cryptocurrency exchange Dasset goes into voluntary liquidation, leaving customers unable to access their funds and with the firm unresponsive to complaints.[90]
22 January 2024
Terraform, creator ofTerraUSD and Luna, files for Chapter 11 bankruptcy, over one and a half years after the collapse of their coins.[91]
14 February 2024
The liquidator of theKim Dotcom-founded Bitcache indicated the company will be yet another cryptocurrency company failure that takes some untangling.[92]
By February 2026 the price of Bitcoin was lower than when PresidentTrump was elected in 2024. with the industry concerned about a new “crypto winter".The New York Times called the slide "one of the worst crises in the crypto industry since 2022".[93] Nobel economics laureatePaul Krugman said, "It does feel like we’re seeing a real crisis of faith right now."[94]
In May 2022, thestablecoinTerraUSD fell to US$0.10.[95] This was supposed to be pegged to the US dollar via a complex algorithmic relationship with its support coin Luna. The loss of the peg resulted in Luna falling to almost zero, down from its high of $119.51.[96] The collapse wiped out $45billion of total current value in a week.[97] On 25 May, a proposal was approved to reissue a new Luna cryptocurrency and to decouple from and abandon the devalued UST stablecoin.[98][99] The new Luna coin lost value in the opening days of being listed on exchanges.[100]
In the wake of Terra-Luna's collapse, another algorithmic stablecoin, DEI, lost its peg to the dollar and started to collapse.[101][102]
Kwon Do-hyung, the founder ofTerra-Luna, is wanted bySouth Korea and theUS for his role as the creator of the cryptocurrencystablecoin which was guaranteed by an algorithm rather than with appropriate funds, after the loss of 40 billion dollars by investors. He has been arrested inMontenegro.[103]
On the same day, a class-action lawsuit was filed againstSafeMoon alleging it to also be a pump and dump scheme with professional boxerJake Paul, musicianNick Carter, rappersSoulja Boy andLil Yachty, and social media personality Ben Phillips also being named in the lawsuit for promoting the SafeMoon cryptocurrency with misleading information on their social media accounts.[107][108]
On 1 April, a class-action lawsuit was filed in Florida against theLGBcoin cryptocurrency company,NASCAR, professionalstock car racing driverBrandon Brown, and political commentatorCandace Owens alleging that the defendants madefalse or misleading statements about the LGBcoin and that the founders of the company had engaged in a pump and dump scheme.[109]
On 13 June,Binance received a class-action lawsuit from more than 2,000 investors accusing the company of false advertising in promoting TerraUSD.[111]
On 17 June,TerraForm Labs received a class-action lawsuit in the United States alleging the company misled investors in violation of federal and California securities laws in marketing its cryptocurrencies in a manner that resembledsecurities.[112]
On 7 July,Celsius Network received a lawsuit from a former cryptocurrency investment manager alleging the company failed to implement adequaterisk management strategies or accounting practices tohedge the firm against cryptocurrency price fluctuations and protect its ability to repay itsdepositors, and that the company was operating an effectivePonzi scheme.[113]
On 21 July, an ex-Coinbase employee and 2 other men were charged withwire fraud and conspiracy to commit wire fraud. This marked the first time charges were brought to people involving crypto assets.[114]
In early November 2022,Binance, one of the largest crypto exchanges in the world, announced it would be dissolving its holdings in FTX Token (FTT) with reports that most ofFTXliquidity was based in this coin and was very unstable. This announcement came shortly after article surfaced stating that Alameda Research, a trading firm affiliated with FTX held a significant amount of FTT. This resulted in arun on FTX resulting in 90% of all FTT being withdrawn. The price of FTT fell from $22 on 7 November to under $5.00 on 8 November, an 80% drop.[74] Abracadabra.com's stablecoin "magic internet money" (MIM) also briefly lost its peg to theUS dollar for the first time since May 2022.[115] This all resulted in aliquidity crisis with the company unable to pay off the withdrawals. On 8 November, rival Binance announced plans to buy the company to save it from collapse. This sent shockwaves through the crypto market and led to a 10% drop inBitcoin price and a 15% drop in Ether price. The following day, however, Binance immediately withdrew its offer causing Bitcoin and Ether to plummet another 14% and 16%, respectively, to their lowest levels since November 2020.[116] The same day, the SEC and Justice Department launched an investigation into the company.[117] FTX filed for bankruptcy protection on 11 November.[77]
The investorsWarren Buffett andGeorge Soros have respectively characterized it as a "mirage"[128] and a "bubble",[129] while the business executivesJack Ma and J.P. Morgan Chase CEOJamie Dimon have called it a "bubble"[130] and a "fraud",[131] respectively. However, Dimon said later he regrets calling Bitcoin a fraud.[132]
Economic analysis of these market cycles suggests that cryptocurrency price dynamics are characteristic of speculative bubbles, driven more by market sentiment than by traditional economic fundamentals.[138] The increasing integration of crypto with the financial system means these shocks do not occur in isolation. Studies find significant spillover effects, where volatility in cryptocurrency markets transmits to traditional asset classes like equities and commodities.[139] More recent structural models confirm this transmission occurs by affecting overall investor risk appetite and that it extends to the broader macroeconomy, with a notable impact on long-term inflation. This demonstrates a concrete channel through which cryptocurrency bubbles and crashes can have broader economic consequences.[140]
It has been suggested by Lee Reiners, a formerFederal Reserve economist, that "when this crypto bubble bursts — and it will burst — it will end up impacting people across the economy even if they don’t have direct investment in crypto”.[141]
^Shukla, Sidhartha; Nicolle, Emily (25 May 2022)."Terra Averts Total Collapse With Plan to Split Blockchain, Abandon UST Stablecoin".Bloomberg. Archived fromthe original on 25 May 2022. Retrieved31 May 2022.A proposal by the founder of the troubled Terra ecosystem to salvage the project was approved ... The process means Terraform Labs is effectively abandoning the stablecoin TerraUSD, or UST, which from now on will only trade on the Terra Classic blockchain.
^Shen, Muyao (25 May 2022)."Luna token relaunch kicks crypto hype machine back into gear".The Boston Globe. Archived fromthe original on 26 May 2022. Retrieved31 May 2022.Under the approved measure, the original blockchain will split off and be known as Terra Classic, while Luna, which plunged close to zero this month, will be renamed Luna Classic with the ticker LUNC. The new Terra blockchain will start running a coin under the existing Luna name and ticker, and won't include the UST stablecoin.
^Avery, Dan (1 June 2022)."Tech Experts Call on Lawmakers to Push Back Against Cryptocurrency Industry".CNET. Archived fromthe original on 2 June 2022. Retrieved2 June 2022.In an open letter on Wednesday, 26 computer scientists, software engineers and academics – including Harvard computer security expert Bruce Schneier and Google Cloud principal engineer Kelsey Hightower – urged Congress to 'resist pressure from digital asset industry financiers, lobbyists and boosters to create a regulatory safe haven for these risky, flawed and unproven digital financial instruments' ... The letter also cautioned that crypto assets are being used to promote 'unsound and highly volatile speculative investment schemes' to investors who may not understand the real risks. 'The claims that the blockchain advocates make are not true,' Schneier told theFinancial Times. 'It's not secure, it's not decentralized. Any system where you forget your password and you lose your life savings is not a safe system.'
^De Vynck, Gerrit (29 May 2022)."First she documented the alt-right. Now she's coming for crypto".The Washington Post. Archived fromthe original on 31 May 2022. Retrieved31 May 2022.A 28-year-old software engineer who writes Wikipedia articles for fun, White is an odd figure to make the crypto industry cower. On her website, 'Web3 is Going Just Great', White documents case after case of crypto malfeasance: investments that turn out to be scams, poorly-run projects that collapse under mismanagement and hacks that drain supporters' money. As much of the financial and tech elite has rallied around crypto, White has led a small but scrappy group of skeptics pushing the other way whose warnings have seemed vindicated by the cratering in recent weeks of cryptocurrency prices.
^Pahwa, Nitish (12 May 2022)."To Be Clear, Web3 Is Not Going Great".Slate. Archived fromthe original on 28 May 2022. Retrieved31 May 2022.One of the most prominent skeptics these days is Molly White, a software developer who started the blog Web3 Is Going Just Great last December ... The site has gotten quite popular among fellow doubters, and White herself has become a go-to voice countering the hype coming from crypto companies and maxis—even collaborating with other crypto watchers on a project fact-checking mainstream publications' praise of crypto.
^Bernard, Zoe (29 April 2022)."Crypto's CSI: How Molly White Became an 'Absolute Nightmare' for Web3 Evangelists".The Information. Archived fromthe original on 12 May 2022. Retrieved31 May 2022.Over the course of one week in April, Molly White's internet crime blotter Web3 Is Going Just Great documented 15 crypto-related offenses, each of which alone would hobble—or at least humiliate—most other industries ... White is in a unique position to catalog Web3's never-ending highlight reel of disasters. A software engineer who has worked in front-end development at enterprise software company HubSpot for the past six years, the 28-year-old has a sophisticated understanding of the blockchain's underlying technology.
^Cheah, E. T.; Fry, J. (2015). "Speculative bubbles in Bitcoin markets? An empirical investigation into the fundamental value of Bitcoin".Economics Letters.130:32–36.doi:10.1016/j.econlet.2015.02.029.hdl:10454/18101.
