Worst Market Crashes In Crypto History (And What We Can Learn From Them)

Cryptocurrency markets have experienced a tremendous amount of growth and success since the creation of Bitcoin in 2009. However, with any financial market, there are bound to be periods of extreme volatility and crashes. In this article, we will take a look at some of the worst market crashes in crypto history and explore what we can learn from them.

The Mt. Gox Hack (2014)

In early 2014, Mt. Gox, one of the first and largest cryptocurrency exchanges at the time, announced that it had lost almost 850,000 Bitcoins due to a hack. With newer crypto market participants unaware of how to properly secure their digital assets, this event caused panic and led to a significant drop in Bitcoin's value. This crash resulted in a loss of over $450 million for investors and ultimately led to the bankruptcy of Mt. Gox.

The Mt. Gox hack highlighted the importance of security in the cryptocurrency industry. It showed that even large and reputable exchanges were vulnerable to attacks, emphasizing the need for investors to educate themselves on how to properly store their digital assets.

The China Ban (2017)

In September 2017, the Chinese government banned initial coin offerings (ICOs) and cryptocurrency trading. With a major economy like China taking such a stance against crypto, the market saw a significant drop in value.

The China ban demonstrated the impact of government regulation on the cryptocurrency market. It showed that external factors beyond technological advancements and market demand could have a significant influence on prices. This event also highlighted the importance of staying sovereign to government policies and regulations when investing in crypto.

The Crypto Winter (2021)

In 2021, the cryptocurrency market experienced what is known as the "Crypto Winter," a period of extreme bearishness where the prices of most cryptocurrencies plummeted. Bitcoin, for example, dropped from an all-time high of nearly $69,000 in December 2017 to a low of around $17,000 approximately a year later.

The Crypto Winter was a wake-up call for many investors who had become accustomed to the market's upward trajectory. It showed that the crypto market, like any other financial market, is subject to volatility and can experience significant downturns. This event emphasized the importance of diversification and risk management in cryptocurrency investing.

How To Navigate Through Crypto Crashes Effectively

To avoid losing money during a crypto crash, investors should have a strong understanding of the market and their risk tolerance. It is essential to research the projects behind the cryptocurrencies before investing.

Finally, by utilizing the best crypto portfolio management software, Moonrig.io, investors can get real-time insights into their portfolio's performance and make informed decisions during market downturns. This free crypto portfolio tracker enables users to get instant crypto alerts which helps them stay on top of the market and make timely investment moves before the market crashes, potentially saving them from significant losses.