Behind the Bitcoin crash: The digital gold we chased in those years

In the world of digital currency, Bitcoin is undoubtedly the most dazzling star. Since its birth in 2009, Bitcoin has attracted tens of thousands of investors around the world with its decentralized and anonymous features. However, with its drastic price fluctuations, many people have experienced painful losses while enjoying short-term profits. Especially in certain years, the plunge of Bitcoin has aroused widespread attention and discussion. So, in which year did the Bitcoin plunge occur? This article will explore in detail the historical background, causes and far-reaching impact of the Bitcoin plunge on the market.

The price fluctuation of Bitcoin is not a simple phenomenon, but a complex economic behavior affected by many factors. Looking back at the history of Bitcoin, 2013, 2017 and 2020 are three important time nodes. In these three years, Bitcoin experienced several extremely significant plunges, which brought huge shocks to the market.

First, 2013 was an important turning point in the history of Bitcoin. In that year, the price of Bitcoin experienced a rapid rise from $13 to $266, and then plummeted to $50 in just a few weeks. Behind this fluctuation, first of all, due to the extensive media coverage, a large number of new investors were attracted, leading to a sharp increase in demand. However, as the market gradually calmed down, investors' panic began to spread, leading to a sharp drop in prices. This psychological factor is not uncommon in the financial market, and investors often make irrational decisions due to short-term price fluctuations.

In 2017, the price of Bitcoin experienced another crazy rise, soaring from about $1,000 at the beginning of the year to nearly $20,000 in December. However, this wave of growth did not last long, and it was followed by a drastic adjustment. In early 2018, the price of Bitcoin plummeted to $6,000 in just a few months, and then fell to around $3,000 at the end of the year. There are many reasons for this plunge. First, the speculation in the market caused the price to be seriously overvalued, and many investors chose to stop losses when the price fell, further exacerbating the magnitude of the plunge. Secondly, changes in regulatory policies also had an impact on the market. Many countries began to tighten their regulation of cryptocurrencies, and investors became more pessimistic about the future.

In 2020, Bitcoin once again ushered in a new round of skyrocketing, and the price broke through the $20,000 mark in just a few months. However, what followed was a sharp drop in early 2021, and the price once fell back to around $30,000. This time the plunge was mainly due to changes in market sentiment and the impact of the macro economy. During the epidemic, central banks of various countries adopted loose monetary policies, stimulating market liquidity, and investors flocked to digital assets such as Bitcoin. However, as the economy gradually recovered, market concerns about inflation intensified, and investors began to re-evaluate the value of Bitcoin, causing prices to fall again.

Bitcoin price fluctuations are not only a reflection of investor sentiment, but also a true reflection of the supply and demand relationship in the market. In the market, changes in supply and demand often directly affect price trends. In the case of Bitcoin, as more and more people realize its potential investment value, the sharp increase in demand has led to a rise in prices. However, when the market bubble gradually emerges, investors' panic will quickly reverse this trend.

In addition, the plunge in Bitcoin also reflects the fragility of the digital currency market. As an emerging asset class, the Bitcoin market is immature and lacks sufficient liquidity and stability. Many investors often lack sufficient information and experience when facing price fluctuations and are easily affected by market sentiment. This makes the Bitcoin market more vulnerable to external factors to some extent.

When analyzing the reasons for the Bitcoin crash, we also need to pay attention to technical factors. Bitcoin's trading mechanism and network structure will also have an impact on prices. For example, network congestion will lead to longer transaction confirmation time, which in turn affects investors' trading decisions. In addition, hacker attacks, exchange security issues, etc. will also have an impact on the market. These technical factors have exacerbated the volatility of the market to a certain extent, making the price of Bitcoin more susceptible to external factors.

It is worth noting that the plunge of Bitcoin does not mean the end of the digital currency market. On the contrary, many investors have chosen a more rational investment strategy after experiencing the plunge, and gradually realized the value of Bitcoin as an emerging asset. With the continuous development and application of blockchain technology, more and more institutional investors have begun to pay attention to Bitcoin, which provides new impetus for its future development.

After experiencing multiple crashes, the market has gradually matured and investors' awareness has continued to improve. We see that more and more people are beginning to view Bitcoin as a kind of digital gold as part of their asset allocation. This trend has changed people's views on Bitcoin to a certain extent, making it no longer just a speculative tool, but gradually becoming an asset with long-term investment value.

In the days ahead, the price of Bitcoin will continue to be affected by a variety of factors, including market supply and demand, policy changes, and technological advances. As investors, we need to remain rational, pay attention to the dynamic changes in the market, and continue to learn and adapt to the new investment environment. As an emerging asset, Bitcoin is accompanied by risks, but it also contains huge opportunities. For investors who dare to challenge traditional thinking, the future of Bitcoin is still full of possibilities.

In general, the plunge of Bitcoin is a complex phenomenon, involving multiple aspects such as market psychology, supply and demand, and technical factors. After experiencing several plunges, our understanding of Bitcoin is also deepening. In the future, with the maturity of the market and the advancement of technology, Bitcoin is expected to occupy a more important position in the global financial system. For those investors who are brave enough to explore, the world of digital currency is still a stage full of opportunities.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

The development of Bitcoin has not been smooth sailing. Unlike traditional currencies, Bitcoin is a decentralized digital currency that is not controlled by the government. Its price is completely determined by the market and is affected by many factors. Therefore, it is not surprising that Bitcoin prices rise and fall sharply. When the price of Bitcoin falls sharply over a period of time and has no upward trend, it will cause investors to panic to a large extent. Selling a large number of Bitcoins in a short period of time will cause the price of Bitcoin to plummet. So in which year did the Bitcoin price plummet? The following is a detailed introduction by the editor of the currency circle.
 In which year did the Bitcoin crash occur?
The Bitcoin price plummeted on July 5, 2013, when it fell to an all-time low of $65.53. There are many reasons for the Bitcoin price plummet, and one of the most important factors is government policy, which is also one of the main reasons affecting the rise and fall of Bitcoin. Bitcoin does not have government policy support in many countries.
Many people are very resistant to Bitcoin, and people in some countries have very low confidence in Bitcoin because it has no government protection policy. In addition, Bitcoin's price has risen sharply due to the crazy speculation in the early stage, which attracted many investors to buy crazily. At that time, Bitcoin had already appeared in a bubble, and investors could not cash out normally, which made the Bitcoin market more unstable, so there was a downward trend.
Another reason for the plunge in Bitcoin is domestic regulation. Bitcoin has received close attention from regulators, causing some investors to feel unsafe. In addition, some people with ulterior motives spread various rumors in the currency circle, which can easily cause panic among retail investors. Therefore, they will choose to abandon the Bitcoin in their hands, causing the price to plummet.
 What influences the rise and fall of Bitcoin prices?
For Bitcoin, the price does not always rise, so what factors affect the rise and fall of Bitcoin prices? The following are some reasons:
1. International supervision
International regulation has a serious impact on the price of Bitcoin as it determines which markets can be entered, where companies can set up shop, and where Bitcoin miners can operate. While countries such as the United Kingdom, Thailand, and India have been shown to have a direct impact on the price of Bitcoin, there are two major markets that have the greatest impact on the price of Bitcoin: the United States and China.
In the United States, Bitcoin responds to news from regulators and lawmakers. In 2021, President Joe Biden’s infrastructure bill hurt the price of Bitcoin because it made it difficult for decentralized wallet companies to report their customers’ tax data, which they essentially do not collect.
2. Marketing activities
Cryptocurrencies have often crashed along with global markets, with systemic over-leveraging exacerbating these shocks and causing volatility. Leverage is when traders borrow funds from exchanges to enhance their investment potential. When a large number of highly leveraged traders all bet on the Bitcoin price to move one way, it creates an opportunity for other large investors (whales) to move the Bitcoin price in the other direction. Doing so triggers a cascade of liquidations, causing the Bitcoin price to plummet and creating large paper losses for leveraged long traders. The whales are then free to buy Bitcoin at a much cheaper price than before, at the expense of the “rekt” traders.
3. Social Media
When tech CEOs are all over social media, the lines between traditional finance and social media influence can become blurred. Retail investors seem to be particularly sensitive to big influencers’ comments on Bitcoin. After Elon Musk changed his Twitter profile to Bitcoin, Bitcoin surged more than 20% as this signaled to retail investors that Musk might be about to invest in Bitcoin, which he later did through Tesla. This parallels the CEO’s strong influence on other assets, especially Dogecoin.
The above content is the detailed answer of the editor of Coin Circle to the question of which year the Bitcoin crash occurred. For novice investors, learning to analyze Bitcoin price trends and observing market conditions is the most important thing. Any investment has certain risks, and Bitcoin is no exception. In order to avoid risks, investors should not invest blindly. If you really want to invest in Bitcoin, you can invest a small amount of money first, pay more attention to the real-time market of the digital currency market, and learn more about relevant digital currency trading knowledge to avoid going astray and treat winning and losing with a normal mind.