Key Points
- Over $2.3 billion in leveraged crypto positions were liquidated in a single day, with some estimates reaching up to $10 billion.
- The crypto market experienced a significant crash on February 3, dubbed by many as the worst in history.
On February 3, the cryptocurrency market experienced a significant crash, leading to the liquidation of over $2.3 billion in leveraged cryptocurrency positions within 24 hours. Some estimates suggest that the total liquidation could be as high as $10 billion. This crash has been described by many as the most severe in the history of cryptocurrency.
Comparing Crypto Crashes
The severity of a crash can be judged differently based on the methodology used. For instance, if we consider the Bitcoin price drop, losing over 50% in a single day seems worse than a 13% drop that occurred on February 3, 2025. However, some experts believe that the volume of liquidated leveraged crypto assets was higher in the February 2025 crash than the one in 2020. Reliable data to confirm this is not available.
The 2022 crises related to the Terra Luna stablecoin collapse and the FTX exchange shutdown saw more severe liquidations than the 2020 crash. However, they did not result in Bitcoin’s price halving within 24 hours. Despite claims that the recent crash resulted in over $2 billion in leveraged crypto liquidation, Bybit CEO Ben Zhou estimated the overall market liquidations to be $8 to $10 billion. If Zhou’s estimation is accurate, then the total liquidated amount may exceed the combined liquidations of the COVID, Terra Luna, and FTX shutdown.
Historical Bitcoin Crashes
There have been significant Bitcoin crashes in 2011, 2013, and 2017. However, due to a lack of reliable data, it is challenging to compare these crashes to those in the 2020s. In the first half of 2011, Bitcoin’s price went from $2 to $32. After the hack of Mt. Gox, the largest crypto exchange at the time, the price dropped to $0.01.
Despite the severity of the market crash, seasoned cryptocurrency enthusiasts and professionals signal that this does not mean the market’s collapse. The author of Rich Dad Poor Dad, Robert Kiyosaki, described the crash as brutal but reminded us that the best assets in the world are going on sale, making it an excellent time to accumulate wealth.
Traders who used leverage to amplify their profits were the most affected. Long-term hodlers realize that Bitcoin’s price will recover, as it did after previous severe crashes. The momentum leading to the 2021 crypto boom started building right after the March 13, 2020, market collapse. This shows that during turbulent times, many people see crypto as a safe haven.
Following the FTX shutdown, Bitcoin lost around a quarter of its value in a couple of days. After a short period of uncertainty, the price began to rise again, fully recovering in two and a half months and doubling 13 months after the crash. The Terra Luna stablecoin collapse in May triggered a longer Bitcoin price decline, taking over eight months for Bitcoin to fully recover.
The CEO of Binance, Richard Teng, reminded the community that this catastrophic sell-off is not the first and will not be the last. He noted that Bitcoin’s overall trajectory is ascending, despite periodic sharp declines. However, Teng faced backlash, with several users criticizing Binance for listing worthless meme coins and calling the exchange part of the problem. Despite this, the sentiment ‘this too shall pass’ remains prevalent in the crypto community.
