Crypto’s Covid Crash Still 5X Worse Than 2024 Sell-Offs

The
Covid-19
induced
crash
on
March
13,
2020,
remains
the
most
severe
global
crypto
market
correction
in
the
past
decade,
according
to
a
recent
study
by
CoinGecko.
The
market
saw
a
dramatic
-39.6%
drop,
with
the
total
crypto
market
capitalization
plunging
from
$223.74
billion
to
$135.14
billion
in
a
single
day.

Comparing
2020
and
2024
Crypto
Corrections

In
stark
contrast,
the
largest
crypto
market
sell-off
in
2024
was
significantly
milder,
registering
only
an
-8.4%
decline
on
March
20.
Despite
a
recent
four-day
decline
from
$2.44
trillion
to
$1.99
trillion
between
August
2
and
August
6,
2024,
none
of
these
reductions
were
substantial
enough
to
be
classified
as
market
corrections.

Since
the
collapse
of
FTX
in
November
2022,
the
crypto
market
has
not
experienced
a
single
day
of
correction,
highlighting
a
period
of
relative
stability.

Bitcoin
and
Ethereum
in
Focus

Bitcoin
(BTC)
also
recorded
its
most
significant
price
correction
on
March
13,
2020,
with
a
-35.2%
drop.
Ethereum
(ETH)
saw
an
even
steeper
decline
of
-43.1%
on
the
same
day
as
investors
fled
risk-on
assets
amid
global
uncertainty.
The
second-largest
crypto
correction
occurred
on
September
14,
2017,
with
the
market
experiencing
a
-22.3%
pullback.
Bitcoin’s
price
also
dropped
by
-20.2%
on
the
same
day.

Duration
of
Crypto
Corrections

Historically,
the
longest
crypto
corrections
have
lasted
for
only
two
consecutive
days.
Notable
examples
include
January
16th-17th,
2018,
and
February
5th-6th,
2018.
More
recently,
the
market
saw
a
two-day
correction
during
the
FTX
collapse
in
November
2022.

Bitcoin
has
experienced
two
instances
of
consecutive
correction
days,
specifically
in
January
2015
and
during
the
proposed
Bitcoin
Unlimited
fork
debate
in
March
2017.
Ethereum,
on
the
other
hand,
has
had
six
such
instances,
with
the
most
notable
being
the
aftermath
of
The
Dao
hack
in
June
2016
and
the
2022
FTX
collapse.

Frequency
and
Impact
of
Corrections

Since
2014,
there
have
been
62
days
of
market
corrections,
accounting
for
just
1.6%
of
the
time.
The
average
correction
was
-13.0%,
slightly
above
the
technical
cutoff
for
a
market
correction.
The
year
2018
saw
the
highest
number
of
corrections,
with
18
days
of
significant
declines,
reflecting
the
volatile
bearish
conditions
during
that
period.

Remarkably,
2023
did
not
see
any
days
of
market
correction,
as
the
crypto
market
gradually
recovered
despite
challenging
macroeconomic
conditions.
Bitcoin
and
Ethereum
also
did
not
experience
any
significant
corrections
last
year.
However,
Ethereum
has
already
seen
two
days
of
correction
in
2024,
with
a
-10.1%
drop
on
March
20
and
a
-10.0%
decline
on
August
6.

Top
Crypto
Corrections

The
study
ranks
the
top
20
biggest
global
crypto
market
corrections
from
January
1,
2014,
to
August
6,
2024.
The
most
significant
corrections
include
the
-39.6%
crash
on
March
13,
2020,
and
the
-22.28%
drop
on
September
14,
2017.

For
Bitcoin,
the
top
corrections
include
a
-35.19%
drop
on
March
13,
2020,
and
a
-22.26%
decline
on
January
14,
2015.
Ethereum’s
most
severe
corrections
were
a
-53.00%
drop
on
August
8,
2015,
and
a
-43.05%
decline
on
March
13,
2020.

Methodology

The
study
analyzed
daily
percentage
changes
in
total
crypto
market
capitalization,
Bitcoin
price,
and
Ethereum
price
over
the
past
decade,
based
on
data
from
CoinGecko.
Corrections
were
defined
as
decreases
of
10%
or
more,
with
the
cutoff
extended
to
-9.95%
to
account
for
rounding.

For
further
details,
the
full
study
can
be
found
on

CoinGecko.

Image
source:
Shutterstock