Most people know about the Bitcoin price crash that happened in December 2017; the market has not yet recovered since the $19500 USD high, and the memory is still fresh in our minds. At the time of writing, the price is down 67% from the December high, but this is not the first crash Bitcoin has been trough, and it also isn’t even the worst crash.
In June 2011 Bitcoin reached a peak of $33 US after rising from less than $1 in April; after reaching the peak at $33 the price proceeded to drop all the way down to under $2. That is a price drop of over 90%; the biggest in Bitcoin ever, and up to this day it still has not been beaten.
There was no real apparent external reason that caused the price to crash; it seems like a lot of people just decided to buy bitcoins for speculation, because the price started rising more and more. As the price increased, it created a lot of people that were holding the currency not because they believed in the fundamentals of it, but because they wanted to make some quick money.
Once the value increased significantly a lot of people decided to sell creating a downward price spiral. The spiral was continued and amplified by people panic selling because they did not believe in the fundamentals and had never seen a price drop that big.
The current price drop is not unusual for Bitcoin and there have been many drops between the 2011 drop and the December 2017 drop. It was not the first, and very likely won’t be the last.