Biggest Drops In Bitcoin Price

Introduction

Investing in Bitcoin can be a lucrative endeavor, but it can also be volatile and unpredictable. In recent years, the value of Bitcoin has had some drastic fluctuations, with some of the biggest drops happening in its short history. In this article, we’ll take a look at why these drops have occurred and how they have affected the cryptocurrency market as a whole. We’ll also provide some advice on how to best protect yourself when investing in Bitcoin and other cryptocurrencies.

What Are the Biggest Drops in Bitcoin Price?

The most significant drops in Bitcoin price occurred between late 2013 and mid-2015. During this time, the price of Bitcoin fell from an all-time high of around $1,150 to a low of just over $200. This was due to several factors such as the Mt. Gox scandal and the Chinese government’s decision to impose restrictions on trading and exchanges involving cryptocurrencies.

What Caused These Drops?

The biggest drops in Bitcoin price were caused by a combination of factors. The following are eight of the reasons why Bitcoin prices have dropped so drastically in the past few years.

1. Mt. Gox Scandal

In 2014, the Japanese-based exchange Mt. Gox suffered a massive hack that saw 850,000 Bitcoins stolen from its customers’ accounts. This led to a significant crash in the price of Bitcoin as investors panicked and sold off their holdings.

2. Regulation and Government Control

The Chinese government has been cracking down on Bitcoin exchanges in recent years, including banning the use of cryptocurrencies for trading purposes. This has led to a decrease in demand for Bitcoin and other cryptocurrencies as people become less willing to invest due to fears of governmental intervention.

3. High Transaction Fees

Transaction fees on Bitcoin and other cryptocurrencies have been steadily increasing in recent years, making it more expensive to send and receive funds. This has caused some people to look for alternatives to Bitcoin as they become less willing to pay these higher costs.

4. Mining Difficulty

Mining Bitcoins requires a significant amount of computing power, which means that the difficulty of the task is constantly increasing. This makes it more difficult for miners to generate new Bitcoins, which in turn has led to a decrease in demand as fewer people are willing to invest in the process.

5. Market Manipulation

Some investors have been accused of artificially manipulating the price of Bitcoin by using various tactics such as buying and selling large amounts of the cryptocurrency in order to create an artificial demand.

6. Security Concerns

As more people become aware of Bitcoin and other cryptocurrencies, hackers and scammers have taken advantage of this increased attention by targeting users who are less experienced with security measures. This has led to a decrease in public confidence in the safety of investing in Bitcoin and other cryptocurrencies.

7. Competition from Other Cryptocurrencies

In recent years, a number of new cryptocurrencies have entered the market, making it harder for Bitcoin to remain competitive. This has led to an overall decrease in demand as people become more willing to invest in other coins that offer better features or lower fees.

8. Uncertainty of the Future

The future of Bitcoin and other cryptocurrencies remains uncertain. There is a lot of speculation about how governments around the world will regulate them, as well as how they will be used in the future. This has caused some investors to become hesitant to invest in these assets due to fears of potential losses.

How to Invest in Bitcoin Safely?

Despite the risks associated with investing in Bitcoin and other cryptocurrencies, there are several steps you can take to ensure that your funds remain safe.

1. Research Before You Invest

Before investing in any cryptocurrency, it is important to do thorough research on the asset you are considering. Check out reviews from trusted sources and look into the company or project behind it to get a better sense of its potential.

2. Use a Secure Wallet

When investing in Bitcoin, it is important to use a secure wallet such as a hardware wallet or paper wallet. This ensures that your funds remain safe even if your computer is hacked or stolen.

3. Diversify Your Investments

Rather than putting all of your money into one asset, it is wise to diversify your investments and spread them out across several different cryptocurrencies. This reduces the risk associated with a single asset and ensures that you will not lose all of your funds if one fails.

4. Stay Informed

It is important to stay informed about the latest news and developments in the cryptocurrency world. This will allow you to make informed decisions when it comes to investing and help you avoid potential risks.

5. Use an Exchange Platform

Using an exchange platform such as Coinbase or Binance allows you to easily buy, sell, and trade cryptocurrencies in a secure environment. These platforms also provide additional security measures such as two-factor authentication and cold storage, which further protect your funds.

6. Avoid Scams

It is important to be aware of potential scams when investing in cryptocurrencies. Be wary of anyone offering too-good-to-be-true deals or promises and do your research before investing any money. Additionally, always use a secure platform when making transactions and never share your private keys with anyone.

7. Make Small Investments

Rather than investing a large amount of money all at once, it is better to start small and invest in smaller amounts. This will allow you to get a feel for the market and learn more about investing before putting in larger sums of money.

8. Utilize Stop-Loss Orders

Stop-loss orders are a useful tool for limiting potential losses when investing in cryptocurrencies. These orders will automatically sell an asset if it reaches a certain price, which helps to protect your funds from large drops in the market.

Conclusion

Investing in Bitcoin and other cryptocurrencies can be risky, but there are steps you can take to minimize the risk and maximize your returns. It is important to do thorough research before investing and use a secure platform when making transactions. Additionally, diversifying your investments, staying informed, and using stop-loss orders can help ensure that you remain safe while investing in cryptocurrencies.