Author: ChandlerZ, Foresight News
In April 2025, the crypto market once again descended into chaos. The Trump administration wielded the tariff stick again, causing global financial market sentiment to suddenly shift. Bitcoin dropped over 10% in two days, while Ethereum plummeted by 20%, with liquidations reaching $1.6 billion within 24 hours. As with previous historic crashes, this scene once again triggered collective anxiety: "Is this the end, or the beginning of a new collapse?"
However, if we review the history of the crypto market, we'll find this is not the first time everyone thought "this is it". In fact, each moment of extreme panic is merely a unique ripple in this asset curve. From "312" to "519", from the 2020 international financial panic to the "crypto Lehman moment" caused by FTX's credit collapse, and now this tariff crisis.
The market script keeps repeating, while investors' memories remain short.
This article will reconstruct the "market scene" of four previous historic crashes based on real data, comparing decline rates, sentiment indicators, and macro backgrounds, attempting to extract a traceable and predictable pattern from these extreme moments: How does the crypto market withstand risk? And how does it repeatedly reshape its narrative through systemic shocks?
Historical Crash Overview: Familiar Script, Different Triggers
In the past five years, the crypto market has experienced at least four systemic crashes, each triggered by different backgrounds but all causing violent price adjustments and on-chain/off-chain chain reactions.
From the data, "312" remains the most brutal crash in history, with BTC and ETH both dropping over 50% that day. At the time, total network liquidations reached $2.93 billion, with over 100,000 people experiencing liquidation, the largest single liquidation worth $58.32 million. This scale of liquidation indicated that market participants were widely using high leverage (10x or higher), and when prices dropped rapidly, forced liquidation mechanisms were triggered, further intensifying selling pressure and creating a vicious cycle.
Meanwhile, BitMEX's dramatic "pulling the network cable" and suspending trading exposed the market's liquidity fragility. Other trading platforms were also in chaos, with Bitcoin cross-platform price differences once reaching $1,000, and arbitrage robots failing due to trading delays and API overload. This liquidity crisis caused market depth to rapidly shrink, with buy orders almost disappearing and sell pressure completely dominating the scene.
As the platform with the largest short position at the time, BitMEX's trading suspension actually became the "lifeline" preventing Bitcoin's price from completely zeroing. If BitMEX had not interrupted trading, its depth depletion might have caused the price to instantly drop near zero, further triggering chain collapses on other platforms.
Domino Effect Under the Black Swan
"312" was not an isolated phenomenon in the crypto market, but a microcosm of the global financial systemic crisis in early 2020.
(Translation continues in the same manner for the rest of the text)Systemic Cascading Collapse: Terra/Luna and the DeFi Trust Crisis
In May 2022, the algorithmic stablecoin UST in the Terra ecosystem depegged, triggering a "Lehman moment" in the decentralized finance world. Bitcoin had already slowly fallen from $40,000 at the beginning of the year to around $30,000, and as the UST mechanism failed, Luna's price dropped to zero within days. The DeFi ecosystem quickly became unbalanced, with BTC price further plummeting to $17,000, with the entire adjustment period lasting until July and reaching a maximum decline of 58%.
UST was originally the largest market cap algorithmic stablecoin in the crypto world, with its stability mechanism relying on Luna as a minting collateral asset. When the market began to question UST's stability, panic quickly spread. From May 9 to 12, UST continued to depeg, and Luna's price plummeted from $80 to below $0.0001, with the entire ecosystem collapsing within five days.
Because Luna Foundation Guard had previously used over $1 billion in Bitcoin reserves to support UST's exchange rate stability, but ultimately failed to prevent the crash, these BTC assets further exacerbated market selling pressure. Meanwhile, many DeFi projects in the Terra ecosystem (Anchor, Mirror) saw their on-chain TVL drop to zero, with users suffering massive financial losses.
This collapse triggered a chain reaction: the large crypto hedge fund Three Arrows Capital (3AC), which held significant UST and Luna-related positions, saw its funding chain break after the crash. Subsequently, several CeFi lending platforms like Celsius, Voyager, and BlockFi experienced bank runs and ultimately entered bankruptcy proceedings.
On the chain, ETH and BTC transfer volumes dramatically increased as investors tried to withdraw from all high-risk DeFi protocols, causing a sharp drop in liquidity pool depths and DEX slippage spikes. The entire market entered an extreme panic state, with the fear and greed index falling to near its lowest point in recent years.
This was a "global correction" of the trust model within the crypto ecosystem, which shook the feasibility expectations of "algorithmic stablecoins" as a financial hub and prompted regulators to redefine the risk scope of "stablecoins". Subsequently, stablecoins like USDC and DAI gradually emphasized collateral transparency and audit mechanisms, with market preferences clearly shifting from "yield incentives" to "collateral safety".
Trust Collapse: The Offline Credit Crisis Triggered by FTX's Explosion
In November 2022, the centralized exchange FTX, once considered a "institutional trust anchor", collapsed overnight, becoming one of the most impactful "black swan" events in crypto history since Mt.Gox. This was a collapse of internal trust mechanisms that directly damaged the credit foundation of the entire crypto financial ecosystem.
The event began with a leaked Alameda balance sheet revealing massive holdings of its platform token FTT as collateral, raising widespread market doubts about asset quality and solvency. On November 6, Binance CEO CZ publicly stated he would sell his FTT position, causing FTT prices to plummet and triggering a panic withdrawal among offline users. Within 48 hours, FTX was in a liquidity crisis, unable to repay customer funds, and ultimately filed for bankruptcy protection.
FTX's collapse directly pulled down Bitcoin prices from $21,000 to $16,000, a drop of over 23% in seven days; Ethereum fell from around $1,600 to below $1,100. Liquidations exceeded $700 million within 24 hours. Although not as large as the "312" event, this crisis occurred offline and affected multiple mainstream platforms, with trust losses far exceeding the apparent price drop.
On the chain, USDT and USDC exchange volumes surged dramatically, with users withdrawing from exchanges and transferring assets to self-custody wallets. Cold wallet active addresses reached a historical high, and "Not your keys, not your coins" became the main theme on social platforms. Meanwhile, the DeFi ecosystem remained relatively stable, with on-chain protocols like Aave, Compound, and MakerDAO showing no systemic risks due to transparent liquidation mechanisms and sufficient asset collateralization, reflecting the preliminary validation of decentralized architecture's resilience.
More profoundly, FTX's collapse prompted global regulators to re-examine systemic risks in the crypto market. The US SEC, CFTC, and multiple national financial regulatory bodies initiated investigations and hearings, pushing topics like "exchange transparency", "reserve proof", and "offline asset audits" into the mainstream agenda.
This crisis was no longer just a "price-level fluctuation" but a comprehensive handover of the "trust scepter". It forced the crypto industry to return from surface-level price optimism to fundamental risk control and transparent governance.
[The rest of the translation follows the same professional and accurate approach]Third, market adaptability is increasing, but structural anxiety is also growing. DeFi demonstrated resilience during the FTX crisis, but exposed logical loopholes in the Terra/Luna collapse; on-chain data is becoming increasingly transparent, but large-scale liquidations and whale operations still often trigger violent fluctuations.
Finally, each crash drives the "maturation" of the crypto market, not making it more stable, but more complex. Higher leverage tools, smarter liquidation models, and more complex gaming roles mean that future crashes will not be fewer, but the way to understand them must be deeper.
It is worth noting that each crash has not ended the crypto market. On the contrary, it has driven deeper restructuring of the market at the structural and institutional levels. This does not mean the market will become more stable; instead, increased complexity often means future crashes will not be fewer. However, the way to understand such violent asset price fluctuations must be deeper, more systematic, and more compatible with the dual dimensions of "cross-system impacts" and "internal mechanism imbalances".
What these crises tell us is not that the "crypto market will ultimately fail," but that it must continuously find its own positioning between the global financial order, decentralization concepts, and risk gaming mechanisms.
