The crypto industry can provide people with success, security, and profit, but it can't promise stability.
Most cryptocurrencies are volatile by nature and are subject to fairly frequent crashes. Even the biggest cryptos, like Bitcoin, have suffered crashes, but why exactly is this the case?
The price of any cryptocurrency may be influenced by a variety of variables. Let's take a look at some of Bitcoin's prior collapses to see how cryptos may be impacted in various ways.
Since the crypto boom in 2020, Bitcoin has experienced its fair share of highs and lows. Bitcoin has risen to unprecedented heights, with a price of well about $70,000 being achieved in November 2021.
However, in the crypto sector, these types of exponential price increases seldom continue, and Bitcoin's price started to plummet immediately after it hit this high point.
However, the price decline proceeded beyond what was projected at the start of 2022, with January seeing the price fall below $40,000. This dip is reported to have been caused by suspicions that the US might begin to regulate digital assets more strictly, giving many investors the creeps.
In May 2022, the stock market fell, and Terra Luna and TerraUSD crashed and lost virtually all of their worth, causing Bitcoin's price to plummet even more. Bitcoin plunged below $30,000, much to the dismay of investors all across the globe, resulting in massive financial losses.
Bitcoin, on the other hand, is no stranger to collapses. Despite being a widely used cryptocurrency, its price has been influenced by even minor occurrences.
Even Elon Musk's announcement that Tesla would no longer accept Bitcoin caused a big market dip in May 2022