Did you know that Bitcoin surpassed the $100,000 mark for the first time on December 5, 2024, capturing global headlines but eventually dropping by over 10% within a single hour? This is a reminder of just how volatile the Bitcoin market can be. Bitcoin is generally unpredictable, and that can put traders on the edge. This volatility triggers a common fear: Is Bitcoin destined for a permanent crash? Or will it rise, stronger than ever?
In this guide, we’ll analyze and discuss potential causes of the Bitcoin market crash, how Bitcoin has survived past price drops, and what the future holds.
What Can Cause Bitcoin’s Crash?
1. Public Figures and Negative Commentary
In certain scenarios, words move markets more than policies. A single tweet or interview from a high-profile executive can change the market by billions.
It’s wild how just one tweet or comment from a big-name executive can shake the entire crypto market—literally by billions!
Take this for example: when Twitter’s former CFO, Ned Segal, said he didn’t think Bitcoin was a good investment for companies, a lot of traders got nervous. Some even started selling off their coins.
And then there’s Elon Musk—he’s like the king of crypto reactions. Back in February 2021, he simply changed his Twitter bio to “#Bitcoin” and boom—Bitcoin’s price jumped nearly 20% in just a few hours. But not long after, he tweeted that Tesla would stop accepting Bitcoin because of environmental concerns, and just like that, the price dropped by about 15%.
It really shows how much influence a single post can have.
For example, when Twitter’s former CFO, Ned Segal, publicly dismissed Bitcoin as a viable corporate investment, traders became skeptical, and some even sold off their coins. In February 2021, Elon Musk changed his Twitter bio to just “#Bitcoin,” causing the Bitcoin price to rise by nearly 20% in a few hours. Later that year, he tweeted that Tesla would no longer sell Bitcoins and would stop accepting Bitcoin payments. That single tweet triggered environmental concerns, causing the Bitcoin price to crash by around 15%.
In this kind of market, sentiment is everything. Investors often panic due to what someone has said. This makes digital assets like Bitcoin highly vulnerable to crashes caused by market sentiment.
2. Global Crackdowns on Bitcoin Mining
In 2021, China banned Bitcoin mining. The price of Bitcoin dropped immediately because mining new coins got harder. So what happened? Miners packed up and moved to places like the U.S., Kazakhstan, and Canada.
This small drop in value taught everyone a big lesson: when major countries suddenly make a major move, the whole crypto market feels it. Just imagine if the U.S. or Russia ( which are currently the two big players in Bitcoin mining) did a similar thing. It would shake everywhere and everything.
Some countries, like Nigeria and India, have not fully embraced Bitcoin. But then there’s El Salvador, that embraced Bitcoin fully! Bitcoin is just like regular money over there. You can literally buy stuff at the market with it, like you’re spending regular cash.
Historical Bitcoin Price Crashes Explained
Bitcoin has faced several dramatic crashes since its creation, each testing its strength and long-term value. From exchange hacks to global panics and failed crypto projects, these moments shaped Bitcoin’s journey. Here’s a quick look at the biggest crashes and what each one taught the crypto world.
1. Bitcoin’s First Major Crash
In 2011, Bitcoin fell from $32 to $2 due to a hack. In 2011, Bitcoin experienced its first major crash when Mt. Gox, the largest exchange at the time, was hacked. The price dropped from $32 to just $2, causing widespread panic among early users.
This breach affected crypto security, although it did not harm the Bitcoin protocol in any way. We can draw a lesson from this event that teaches how important safe exchange practices are; it also marked the beginning of Bitcoin’s resilience.
2. 2018 Bitcoin Crash After the 2017 Bull Run
In 2017, bitcoin climbed to $20,000, but by the end of 2018, it had crashed to $3,000. During a hype-fueled bull run, Bitcoin surged from under $1,000 to nearly $20,000 in 2017. However, by late 2018, it crashed to $3,000 amid regulatory uncertainty, failed Initial Coin Offerings (ICOs), and investor sell-offs.
This crash cleared off many fraudulent projects and strengthened Bitcoin’s credibility as it survived the downturn. It was a brutal correction but laid the foundation for a more mature and secure crypto market.
3. 2020 COVID-19 Panic and the 50 Percent Drop
In March 2020, when COVID-19 panic hit, Bitcoin’s value fell by 50% in a single day. The COVID-19-triggered global economic panic in March 2020, and Bitcoin was also affected. The Bitcoin market crashed to nearly 50% in a single day, moving from $8,000 to below $4,000.
Investors fled to cash as fear gripped financial markets. This was a moment that extensively tested Bitcoin’s reputation. But Bitcoin still survived. It eventually became a hedge for institutional and retail investors alike.
4. 2022 Crash Triggered by Luna and FTX Collapse
In 2022, when Luna and FTX crashed, Bitcoin’s price fell from $68,000 to less than $20,000. Terra Luna and the FTX exchange collapsed at the time, and Bitcoin fell from $68,000 to under $20,000.
Billions in investors’ funds were lost, trust in centralized platforms plummeted, and regulators tightened their grip. However, the crash renewed focus on Bitcoin’s decentralized nature and sparked a movement toward safer, self-custodied wallets and trustless systems.
These events comprise part of Bitcoin’s market crash history, but what’s remarkable is that Bitcoin always bounces back each time. When these crashes occur, consolidation, adoption growth, and new all-time highs follow.
Will Bitcoins Ever Crash?
Volatility is embedded in Bitcoin’s DNA. Let me explain further.
After falling to less than $60,000 in early 2024, Bitcoin recovered briefly before falling again. For people holding the coin long-term, the constant rise and fall of the coin is a test of their conviction and does not directly reflect Bitcoin’s value.
Matthew Dibb, COO of Stack Funds, said there is still a chance that Bitcoin would see steep losses, especially with looming regulatory pressure. On the other hand, several analysts predict that Bitcoin will gain momentum over the next decade. Many believe Ethereum may surpass Bitcoin in value and utility, making it the world’s dominant digital asset.
Still, the people who use Bitcoin the most—miners, developers, and maximalists—remain unshaken. Since we are not fortune tellers, we cannot predict Bitcoin’s future, but it will likely stay around for a while.
How to Prepare for Potential Bitcoin Crashes
Bitcoin’s price can crash anytime, and because nobody can truly predict when that will happen, it’s crucial to get prepared. If you arm yourself with the right strategy, tools, and mindset, you can effectively survive any market crash and protect your investments.
1. Diversify Your Crypto Assets
While Bitcoin is a highly rewarding and promising investment, it is unwise to put all your money into it. Instead, spread your capital across different assets, such as altcoins, stablecoins, fiat currency, stocks, or even gold. A diversified portfolio reduces risk and protects you from the full impact of a single market crash or downturn.
2. Use Stop-Loss Orders
Stop-loss orders help you exit trades automatically if Bitcoin’s price drops below a threshold. They’re used to manage risk during trading effectively; this tool becomes even more ideal during volatile markets, saving you from deeper losses and letting you respond faster when prices drop.
3. Stay Updated
Stay informed through relevant and crypto publications on platforms like CoinDesk, Cointelegraph, etc. False news spreads fast during market crashes. Double-check facts and monitor announcements to make decisions based on accurate, verified information, not fear or speculation.
4. Avoid Emotional Trading
Most emotional decisions often lead to costly mistakes. Don’t let fear or excitement dictate your trades. Build a strategy with clear goals, stick to your plan during volatility, and remember that patience and discipline often outperform emotional reactions in crypto investing.
Best Place to Sell Your Bitcoins During Volatility — Prestmit
In a bearish Bitcoin market, volatility can take away a great magnitude of profits in a blink. At moments like that, prices change abruptly, and holding onto a huge amount of coins during such a downturn could result in significant losses. That’s why many smart investors sell their Bitcoin during volatile moments. They monitor the market to identify a moment when prices show signs of peaking.
When you’re ready to sell, you need a platform that offers speed, safety, and the best value—and that’s where Prestmit comes in.
If you are living in Nigeria, Ghana, and other regions, Prestmit offers you instant payouts, real-time Bitcoin rates, and a clean, beginner-friendly interface that ensures your transactions are smooth and stress-free.
Prestmit offers a seamless crypto trading experience with an automated Bitcoin rate calculator for real-time pricing, fast and reliable payouts to local banks or mobile wallets, and zero hidden charges.
It ensures strong security through encryption and two-factor authentication, and features a user-friendly interface suitable for both beginners and experienced traders. Plus, with 24/7 customer support, users can count on quick help anytime they need it.
How to Sell Bitcoin on Prestmit
- Visit the official Prestmit website or download the Prestmit app on the Google Play Store or Apple Store.
- Create a Prestmit account and log in.
- Click “Crypto” and choose “Sell Bitcoin.”
- Generate a BTC wallet address and download the QR code or copy the address to proceed with the trade.
- Follow the prompts to complete your transaction.
- You will receive payment immediately after the successful confirmation of your transaction.
Frequently Asked Questions (FAQs) About Bitcoin Market Volatility
Can Bitcoin ever go to zero?
This is not a likely scenario. Bitcoin has a committed group of holders and investors who remain wholeheartedly committed to Bitcoin even in the worst scenarios and have the backing of major companies and influential individuals.
If crypto crashes, where do the funds go?
It doesn’t “go” anywhere. When prices crash, the value of Bitcoin drops because investors are selling at lower prices. Value drops only because buyers are no longer willing to pay as much for the coins, not because money disappears.
Will cryptocurrency survive long term?
Yes, this is very likely. Some specific coins may fail, but the underlying blockchain technology and digital asset framework have become critical to modern finance. Bitcoin and Ethereum are at the forefront of long-term adoption.
Is it safe to invest in Bitcoin right now?
Like any investment, Bitcoin has risks. Its price has historically been highly volatile; it has risen dramatically and fallen almost immediately at some point. So, there are no certainties. However, Bitcoin remains a relatively secure, long-term, and advantageous investment option if you can handle risk.
Conclusion
As I emphasized in the article, Bitcoin has undergone significant changes. Everyone is actively observing the market and is constantly uncertain of the future. And, despite all this, it has survived. The constant legal battles and listening to what people say make it seem like it will soon crash, but it also suggests that it could grow into something significant.
Whether you believe Bitcoin will stand the test of time, or are just spectating, or investing cautiously, the market trajectory is not moved by your sentiments or concerns.
And if you’re ever looking to trade Bitcoin safely and profitably, Prestmit is the platform to trust. They are reliable, secure, and ready for the next market move.
