Today 15 years ago: June 19, 2011 was the biggest flash crash in the BTC history

[aoluain]

I can imagine this happening back then when Bitcoin being such an early young ground breaking
technology coming from being worth nothing to being $17 would have been seen by many as
massively overpriced. So as soon at a drop starts and everyone gets wind of it it and the fear
spreading becomes almost like a "run on the banks" and the fear spreads.

[Odusko]

First of how many people bought bitcoin at the flash price at that time, and we need that statistics so that it can help us to expand our search more and to build an understanding towards that incident, although inhave read about that bitcoin flash crash incident but not sure if there were investors that bought bitcoin at that time, most people will be scared already and even call bitcoin a scam since it crashed, it takes courage and understanding of bitcoin to invest innthat conditions.

[Pmalek]

And besides, most people back then thought that this was more of like a play money where you didn't need to be serious about. More than likely, even Satoshi himself was not expecting that btc will have this value in the market.

The late Hal Finney was different even in those days. Only days after bitcoin was released and the first blocks started to get mined, Hal was talking about what could happen if the Bitcoin experiment succeeded. He believed that if bitcoin became a dominant and global payment method it could be worth $10 million per coin. I think it was also Hal who said that bitcoin will either go to $1 million from here (at that specific time in history) or down to zero.

[notocactus]

In June 19, 2011 happened the biggest flash crash in the Bitcoin history. It is remarkable that neither before nor after that day have been similar incidences with Bitcoin: BTC price fell from $17 to $0.01 and bounced back in minutes.

Here is one video ("Bitcoin flash crash 2011" from Lark Davis)  https://br.tradingview.com/news/u_today%3A73be1a13a094b%3A0-bitcoin-crashed-from-17-to-0-01-14-years-ago-today/
Every single second of its 429 seconds is full of interesting facts/emotions. Look at the Bitcointalk threads created during these historical minutes !

One of the biggest lessons I got from this incident was how huge can be the value of money in the right time and place.

Biggest crash, ok it's fine if you want to find it but firstly let's define which market fall is a biggest crash?

• It's a biggest market fall in a percentage of price change.
• It's a biggest market fall in total Bitcoin market cap loss as consequence of price fall.
• It's a biggest market fall in total value of liquidations on Bitcoin market.

I am more interested in the second and third definition. You can imagine that a shitcoin can lose all of its market cap and value within seconds, minutes or hours, is it really deserved to call as a biggest crash ever?

The late Hal Finney was different even in those days. Only days after bitcoin was released and the first blocks started to get mined, Hal was talking about what could happen if the Bitcoin experiment succeeded. He believed that if bitcoin became a dominant and global payment method it could be worth $10 million per coin. I think it was also Hal who said that bitcoin will either go to $1 million from here (at that specific time in history) or down to zero.

You implied about this email and prediction from Hal Finney.
https://www.mail-archive.com/cryptography@metzdowd.com/msg10152.html

"Hal Finney" Sun, 11 Jan 2009 10:22:14 -0800

Satoshi Nakamoto writes:
> Announcing the first release of Bitcoin, a new electronic cash
> system that uses a peer-to-peer network to prevent double-spending.
> It's completely decentralized with no server or central authority.
>
> See bitcoin.org for screenshots.
>
> Download link:
> http://downloads.sourceforge.net/bitcoin/bitcoin-0.1.0.rar

Congratulations to Satoshi on this first alpha release.  I am looking
forward to trying it out.

> Total circulation will be 21,000,000 coins.  It'll be distributed
> to network nodes when they make blocks, with the amount cut in half
> every 4 years.
>
> first 4 years: 10,500,000 coins
> next 4 years: 5,250,000 coins
> next 4 years: 2,625,000 coins
> next 4 years: 1,312,500 coins
> etc...

It's interesting that the system can be configured to only allow a
certain maximum number of coins ever to be generated. I guess the
idea is that the amount of work needed to generate a new coin will
become more difficult as time goes on.

One immediate problem with any new currency is how to value it. Even
ignoring the practical problem that virtually no one will accept it
at first, there is still a difficulty in coming up with a reasonable
argument in favor of a particular non-zero value for the coins.

As an amusing thought experiment, imagine that Bitcoin is successful and
becomes the dominant payment system in use throughout the world.  Then the
total value of the currency should be equal to the total value of all
the wealth in the world. Current estimates of total worldwide household
wealth that I have found range from $100 trillion to $300 trillion. With
20 million coins, that gives each coin a value of about $10 million.

So the possibility of generating coins today with a few cents of compute
time may be quite a good bet, with a payoff of something like 100 million
to 1! Even if the odds of Bitcoin succeeding to this degree are slim,
are they really 100 million to one against? Something to think about...

Hal

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[BitBrainers]

Biggest crash, ok it's fine if you want to find it but firstly let's define which market fall is a biggest crash?

I am more interested in the second and third definition. You can imagine that a shitcoin can lose all of its market cap and value within seconds, minutes or hours, is it really deserved to call as a biggest crash ever?

You're onto the thing that matters with the percent vs dollars vs liquidations split. By percent, 2011 wins and nothing's close. By dollars it barely shows up, because the market was basically one exchange. Mt. Gox was something like 70-80% of all trading, so a hacked admin account didn't crash the market, it pretty much was the market. $17 to a cent on Gox while there was nothing else anywhere to set a price against it.

That's why "can it happen again" never sat right with me. The single point of failure got spread out since, across exchanges, perps, ETFs, OTC desks. A 99% wick on one platform gets arbitraged away in seconds now. But the next bad day looks different, not impossible. It won't be one hacked exchange, it'll be funding and liquidity drying up everywhere at once. The crash didn't get engineered out. It changed shape.

[RevealJS]

This was caused by the Mt. Gox hack, which led to its crash. I didn't know Bitcoin then, but I have read about it a couple of times since I've been in Bitcoin.

Yes, you are actually right on what you just said above regarding this crash to have been caused as a result of Mt.Gox hack which took place in 2011. Which was caused as a result of an hacker having access to the exchange's administrative account and manipulated the price of Bitcoin, which caused a massive sell, resulting to the price of Bitcoin to fall from $17 to $0.1 back then in 2011. And we all know that Mt.Gox been one of the earliest and existing crypto exchange as of then, its influence actually had a strong effect on the price nature of Bitcoin back then. And sometimes, only those who might have bought Bitcoin during this fall and transfer it into their non custodial wallets will be very happy right now, and likewise this is another proof of the great potential Bitcoin hà at this moment.

The "hacker having access to the exchange's administrative account" was more likely the CEO Criminal Mark. Him and possibly a small group of insiders, who later protected him from life in jail, seem to have made off with a massive stash of BTC

[JoyMarsha]

Imagine being able to go back in time and buy bitcoins for $0.01 

In 2011, although I had heard of bitcoins and cryptocurrencies, access to them wasn't easy and little was known about the subject, at least in my opinion. I believe that all the cryptocurrencies we know today went through something similar.

Went through something similar that many of them didn't survive, to bounce back strong in the years to come after a terrible crash.

How many people could strongly believe in Bitcoin after the crash in 2011, after seeing it attain a higher price of $17 to 0.01 cent. There won't be many people who will trust Bitcoin, to reinvest in it.

Lucky are those who invested and reinvested in Bitcoin after the crash without thinking of dumping their Bitcoin as others did.

[The Cryptovator]

In June 19, 2011 happened the biggest flash crash in the Bitcoin history. It is remarkable that neither before nor after that day have been similar incidences with Bitcoin: BTC price fell from $17 to $0.01 and bounced back in minutes.

Here is one video ("Bitcoin flash crash 2011" from Lark Davis)  https://br.tradingview.com/news/u_today%3A73be1a13a094b%3A0-bitcoin-crashed-from-17-to-0-01-14-years-ago-today/
Every single second of its 429 seconds is full of interesting facts/emotions. Look at the Bitcointalk threads created during these historical minutes !

One of the biggest lessons I got from this incident was how huge can be the value of money in the right time and place.

During the crash I wasn't familiar with Bitcoin, nor was I aware of the dump. But I believe everyone should know the Bitcoin history; thanks for bringing it up again. The bounce back proves Bitcoin's strength, actually, and we can see right now how strong Bitcoin is. I have faith we won't see such a dump again, although we may see a significant dump.

However, we should take a lesson from that dump. Because even though we are in a bear market right now, it won't last long. We will see Bitcoin breaking the record of ATH again and again. It's our belief, not prediction. So whoever is still confused should either invest or not – they should make decisions now.

[Hamza2424]

We don't hope to see Bitcoin get to such level. If it happens a lot of investors would not hesitate to sell of what's left. They won't be willing to buy back out of fear Because the only thing that would be on their mind is how sure are they that it would bounce back.

At that price anyone could afford to own 1 BTC, I am sure, so when that happens I am also very sure that everyone will definitely buy 1 haha.

No matter how risky it could be for them, we have a lot of people who gambled their money in the start. They did not know where the ceiling is, they thought there is one but we know there is none and we have also seen its flight toward the moon.

We have a better idea than the ones who had no idea at all. We have seen it pump like no other coin in the market, so once I get that chance I will make sure to own at least 1 BTC even with fear.

[taufik123]

-snip-
Today, it would be hard for such an incident to repeat itself because the Bitcoin systems has grown to include more markets across many exchanges, perpetual markets, ETFs and institutional OTC desks.
There are automation bots deployed as circuit breakers to prevent a recurrence of this even within the shortest time frame and so much is being done after that hard lesson.

If such incident never happened, am sure Bitcoin and crypto currencies wouldn't have become stronger and have even grown to become acceptable in different levels up to countries having reserve Bitcoin banks just to acknowledge its worth and value.

Difficult or not now the method for hacking is also sophisticated and many other ways can be done as well,
Not only targeting exchanges but targeting users who have a lot of BTC and it really happens by doing a neat and undetectable Social Enginering Method.

Now exchanges may be better prepared for all kinds of Hacks, They also have a reserve fund that is used to overcome the problem of hacking
and losing funds with the SAFU "Secure Asset Fund for Users" This is an emergency insurance fund or financial reserve set up by crypto exchanges such as Binance
to compensate users for losses in the event of a hack or loss of assets.  Not only Binance but all major exchanges already have this security in place, so that users' funds are still safe in the event of a default.

The Bitcoin System is getting stronger day by day, some Bitcoin Core updates are constantly being carried out and some methods that can no longer be used to hack the Bitcoin network,
but you must remain vigilant because methods that did not even work before can be used with the negligence of Bitcoin owners directly.

[tabas]

At that price anyone could afford to own 1 BTC, I am sure, so when that happens I am also very sure that everyone will definitely buy 1 haha.

I don't think that there will be that much who'd buy that. Because at that time, bitcoin wasn't yet popular back then. And we always get this thought that back then whenever the price was too cheap, we think that we'll definitely buy at that time.

Lucky are those who invested and reinvested in Bitcoin after the crash without thinking of dumping their Bitcoin as others did.

They're the real ogs and believers of Bitcoin back then. They're willing to take risk when the world was trying to dump them through emotional articles and FUD that they're having. We've been there as well but they're more extreme at that time when only very few of them in the community were there.

[Sonia_123]

Good to note, for those holders how was their feeling like, these are the proud holders of Bitcoin imagine Bitcoin dropping from $ 17-$ 0.01, so surprising that this happens on that day just a flash and a lot of hearts were broken and gathered back what if it really happened and never raise up.

[ArabBTC]

In June 19, 2011 happened the biggest flash crash in the Bitcoin history. It is remarkable that neither before nor after that day have been similar incidences with Bitcoin: BTC price fell from $17 to $0.01 and bounced back in minutes.

Here is one video ("Bitcoin flash crash 2011" from Lark Davis)  https://br.tradingview.com/news/u_today%3A73be1a13a094b%3A0-bitcoin-crashed-from-17-to-0-01-14-years-ago-today/
Every single second of its 429 seconds is full of interesting facts/emotions. Look at the Bitcointalk threads created during these historical minutes !

One of the biggest lessons I got from this incident was how huge can be the value of money in the right time and place.

I don't know it is a biggest crash ever in Bitcoin market history but I don't care about it and with me there is no need of verification this information at all. What I noticed is over time, Bitcoin and its market have grown and become both bigger and stronger, that's enough for its future as well as for a Bitcoin enthusiast and investor like me.

Bitcoin's historical corrections from all time highs.

Well sometimes it’s good to verify certain statistics, bitcoin is amongst the fastest growing assets and to me it is good for anyone that wants to fully invest in bitcoin to have proper knowledge about it before investing in it. Knowing about bitcoin past history, present value and future predictions will actually help one invest wisely, personally to me i like the statistics because it is still reminding me of caution knowing fully well that in the past bitcoin actually crashed tremendously and at such one should not put all his eggs in one basket, hence, a need for one to diversify his investment.

[pooya87]

One of the biggest lessons I got from this incident was how huge can be the value of money in the right time and place.

I'm not sure I understand what that means or how you came up to this lesson but if you check out the article again it says "proved to be the result of a software glitch on the aforementioned trading platform." You can't call that "biggest flash crash", because that is not a natural market movement. It is a bug in the exchange platform and it has happened a couple of other times, I think back in 2017 Coinbase had a similar glitch and price dropped to a fraction after they wiped the ask orderbook!

The only thing that this proves is that centralized exchanges can have serious bugs, so you need to be careful when using them.

[shinratensei_]

First of how many people bought bitcoin at the flash price at that time, and we need that statistics so that it can help us to expand our search more and to build an understanding towards that incident, although inhave read about that bitcoin flash crash incident but not sure if there were investors that bought bitcoin at that time, most people will be scared already and even call bitcoin a scam since it crashed, it takes courage and understanding of bitcoin to invest innthat conditions.

Not sure about the statistic but there is famous story about Kevin Day doing 3k dollar worth of order to buy bitcoin @$0.01 but got rolled back by the exchange before he is able to withdraw.
I expected everybody else to get the same treatment which means it's just a temporary thing.

[tbct_mt2]

I think you should. Not that it should discourage you from Bitcoin, but you would understand its history and know how far it has come. This would, in turn, strengthen your conviction of the coin.

From the video, you can hear whoever it is say, "Were the critics right?"
Things will happen where you would question whether Bitcoin is actually too big to fail. There is a small chance, but I won't be surprised if something happens that makes Bitcoin crash to $20k. At that point, your conviction would be tested, and if you don't fully understand its history, you might be shaken.

It seems you did not understand my post correctly. I read and learn about Bitcoin history including Mt. Gox hack but I did not care about a biggest flash crash in Bitcoin history. Is it from Mt.Gox, is it from anything else, if it belongs to an event many years ago, I am not too interested in while without knowing about that does not make me weaker or fearful in Bitcoin market at the present and in the future.

Because as said, I read and learn about Bitcoin and its market history, I knew what happened in the past, and most important Bitcoin has strongly survived through these past events even they were terrible. In 2026, Bitcoin has been much stronger than it was in many years ago, so what will kill Bitcoin?

Nothing, no flash crash will be able to kill Bitcoin since 2026.

[Hamza2424]

I don't think that there will be that much who'd buy that. Because at that time, bitcoin wasn't yet popular back then. And we always get this thought that back then whenever the price was too cheap, we think that we'll definitely buy at that time.

Yep from the level of adoption we have here Bitcoin is never going to dip below $20k. We are not just talking and making all these predictions. I still remember the last bear run when we used to discuss the same thing, but when Bitcoin was hitting a new all time high of $120k, every one of us was regretting why the hell we did not try to ride the wave.

The frustration was real and it is happening all over again.

We hope to buy at prices that will never happen and from my side that was a joke because I know that it is not an option, but those who think Bitcoin could dump below $30k to $20k will regret it again.