Will Bitcoin crash to zero? All you need to know

Some people consider BTC the most promising means of investing money and predict unprecedented growth against the background of other investment instruments. Others do not believe in cryptocurrency and compare it with a pyramid scheme and a bubble. Today we will try to find out why Bitcoin is falling and give a logical, argument-based answer to the question – Will Bitcoin crash to zero?

Reasons for Bitcoin’s fall and whether BTC will crash to zero?

Since mid-November 2021, Bitcoin’s decline began, which continues to this day. As of the time of writing the Article, the coin has corrected to $25,776. Against the background of Bitcoin’s fall, all coins from the top 10 capitalization rankings, except for stablecoins, showed negative dynamics.

Here are the main events that could put pressure on BTC.

1. The SEC’s fight with Ripple continues

Media reports say that if the SEC succeeds in proving that XRP is an illegally issued security, the fate of other cryptocurrencies whose issuers are facing similar charges will be in jeopardy.

2. Elon Musk is selling off Bitcoins

The information that Elon Musk’s company SpaceX has sold $373 million worth of Bitcoins appeared in the report by the journalists of The Wall Street Journal. It is no secret that market participants are closely following Musk’s actions and the decisions of the management of companies under his control regarding cryptocurrencies.

3. Investors lose hope for the launch of a spot Bitcoin-ETF in the USA

The lack of confidence in the approval of the instrument amid the SEC’s delay in decision-making reduces interest in cryptocurrency.

4. The hawkish policy of the U.S. Federal Reserve puts pressure on the stock market, and the crypto market in many respects, repeats these movements. 

In the history of Bitcoin, there have been several cases when its price fell to marks close to zero on crypto exchanges. In March 2019, the price of BTC on the BitMax platform fell from $10 thousand to $0.3. In May of the same year, the value of the asset fell to 0 on the BitMEX exchange. 

There are several factors that could theoretically cause the price of Bitcoin to drop to zero such as:

• There will be a total blackout on Earth and there will be no electricity;
• Miners will refuse to process transactions;
• The internet will break down globally.

However, many experts and economists are sure that the limit of the BTC fall is within the range of 15-17 thousand USD  because some people under no circumstances will sell Bitcoins, especially if they have bought them at their peak value because they believe that sooner or later BTC will grow again and they will recover all their losses and earn.

What would happen if Bitcoin crashed to zero?

Recently, there has been a lot of speculation regarding Bitcoin prices. More specifically, the questions are for how long will Bitcoin’s decline continue, when will Bitcoin crash to zero, and if it does, what would happen to BTC?

If Bitcoin fell in value, millions of holders, including crypto whales, would rush to sell it. If all holders become sellers, there will be no one to buy the asset. In addition, cryptocurrency exchanges could delist the coin, making it nearly impossible to sell.

Such a collapse in the price of Bitcoin will surely cause other cryptocurrencies to fall as well. After all, if traders notice that the largest coin on the cryptocurrency market has completely lost its value, many of them will sell their cryptocurrency assets as quickly as possible to avoid further losses.

In addition, the complete crash of Bitcoin will have a serious impact on the crypto-mining sector. The BTC mining market is huge and many people make a living out of it. Payments for mining will become worthless if Bitcoin loses its value and utility, and almost a million miners will be forced to find alternative sources of income.

Potential threats to Bitcoin’s survival

Realizing that Bitcoin is unlikely to ever fully depreciate, we cannot write off a number of threats that could significantly collapse the coin’s value.

• Let’s assume that authorities around the world have completely banned Bitcoin transactions and also closed all major mining pools and data centers: you can only mine underground or on your home laptop. The crypto market would of course break down and the value of BTC would plummet.
• UBS Global Wealth Management experts believe that regulators are the main threat to Bitcoin in the long term. However, this development seems very unlikely. Firstly, in the last few years Bitcoin has not been banned, but, on the contrary, legalized at the state level. Secondly, it is impossible to imagine such a unanimous agreement of all countries. After all, if some states ban Bitcoin, others will support it as they will take an opportunity to become a unique jurisdiction supporting digital innovation. 
• The Bitcoin blockchain is technically obsolete slow, energy-intensive, and not suitable for mass use. So it seems that if another, more advanced blockchain were to emerge, Bitcoin’s value would disappear. But taking into account that thousands of blockchains already exist on the market, and almost all of them are faster and more scalable than Bitcoin that doesn’t affect the coin’s price. Bitcoin’s value has become a kind of crypto standard due to its properties. Moreover, the success of altcoins has a positive impact not only on the entire crypto market but also on bitcoin itself. 
• Bitcoin’s price is held in part by faith in the technology embedded in its network. Could the coin lose that faith? For example, if Bitcoin could be hacked with a quantum computer or if a bug is found in the coin’s algorithm that makes it possible to cancel transactions or counterfeit coins then the exchange rate would surely take a noticeable hit. But for 12 years, Bitcoin’s code has been tested by the best mathematicians. And if there was a bug in it, they would have found it by now.

Bullish Arguments for Bitcoin

Whatever drawdowns and crypto winters Bitcoin experiences, it will definitely not collapse to zero. Moreover, in the long term, it is likely to only grow in value. This confidence has fundamental reasons as follows:

• BTC limited issuance

Bitcoin is designed to get more expensive. Bitcoins will never be more than 21 million coins. Right now, 19.5 million have been mined, of which several million are lost forever. But even after the last Bitcoin is found, there’s a good chance that demand for this asset will continue, which means its price will go up;

• Mining

Mining new coins is a very energy-intensive endeavor. Although mining does not back Bitcoin up, it endows it with a cost of production. The more expensive it is to mine a single Bitcoin, the higher the price at which miners will be willing to sell it;

• Decentralization

This is a unique property and advantage of Bitcoin. The cryptocurrency is not issued by anyone, and its blockchain network is resistant to hacking by hackers;

• Big players

Bitcoin’s fall is also not beneficial to the big players, the so-called Bitcoin whales, who have invested tens of billions of US dollars in BTC;

• Growing acceptance

Bitcoin is increasingly entering the real economy, with millions of people using it every day. Payment services are launching the ability to pay with not only Bitcoin but other popular cryptocurrencies as well, making them available to hundreds of millions of users around the world;

• Collector value

Even if Bitcoin ceases to be a sought-after coin, it is certain that it will be of value to collectors and as a historical artifact.

Bearish Arguments for Bitcoin

The fall of Bitcoin to 0 is not only possible on an individual exchange, it can and should happen with the market rate. Such an assumption was voiced in June 2020 by American investor Jim Rogers. He stated that the first cryptocurrency remains in a state of bubble and will depreciate in the future, as digital assets will not be able to exist being uncontrolled by the authorities. Similar statements have accompanied the first cryptocurrency for all 14 years. Among the main arguments of critics is that Bitcoin is a pyramid scheme as it is not secured by anything and the demand for it is purely speculative. These and other arguments have been repeatedly voiced by Bitcoin critics such as legendary investor Warren Buffett, Bill Gates, Nobel Prize-winning economist Joseph Stiglitz, former Bitcoin Cash supporter Calvin Ayre, Euro Pacific Capital Corporation President Peter Schiff, billionaire Mark Cuban, and the CEO of the Bank for International Settlements (BIS) Agustin Carstens among many others. Investment genius and Berkshire Hathaway CEO Warren Buffett said that he believes all cryptocurrencies, including Bitcoin, are worthless. 

Bearish sentiment has returned to the cryptocurrency market again and brought a lot of fear to novice investors. Bitcoin price fell below $30 thousand after Gary Gensler (head of the SEC) woke the “bears” up, causing a technical correction. On April 18, 2023, he again hinted that cryptocurrencies should adjust to existing US legislation and warned of possible prosecution of unregistered Bitcoin exchanges.

Expert opinions and market sentiment

On the evening of August 17, 2023, the price of the first cryptocurrency plummeted from $28,000 to $25,000, recovering slightly to the current moment. Community members fussed and tried to explain the situation. 

EToro analyst Josh Gilbert speculated that the drop could be related to the $373 million sale of some or all Bitcoins by Elon Musk’s SpaceX, or a rapid change in market sentiment amid a key rate cut by the U.S. Federal Reserve. CoinMarketCap market analyst Tina Teng sees the recent rise in government bond yields as a significant factor in the Bitcoin sell-off. As per her strengthening in the performance of securities usually indicates a reduction in liquidity in the broader market. 

Nevertheless, most crypto analysts are confident that Bitcoin is an asset that has come to the market seriously and for a long time. Despite the high volatility, the first cryptocurrency has almost no chance to completely depreciate, instead on the contrary, it will only strengthen its position.

People who bought Bitcoin for 20-30 thousand US dollars will not part with it, they will keep it until better times. And those who had such foolishness and bought BTC at 50 thousand US dollars will not sell Bitcoin at a loss.

FAQ

Is there a possibility of Bitcoin crashing to zero?

Will Bitcoin ever crash to zero? Theoretically, something serious must happen for Bitcoin to depreciate as much as possible that contradicts the fundamental values originally embedded in the protocol. But even then, it is not excluded that there will be those willing to buy back the asset for nothing.

Also, the emergence of any new technologies replacing the blockchain may be the reason that the Bitcoin price will crash to zero, but this is unlikely to happen in the next few years. Moreover, the demand for BTC will continue for decades, and probably even centuries, to come.

What happens to other cryptocurrencies when Bitcoin crashes? 

If Bitcoin collapses to zero,  for the multimillion world crypto community this will be akin to Armageddon. All altcoins in this market still closely depend upon Bitcoin’s fate. Thus, if BTC falls to zero, this will undoubtedly affect other crypto assets, and obviously not in the best way, and for some, it will be the last day of their existence. However, many experts agree that this could only have happened in the early years of the coin’s existence when mostly only computer geeks knew about it. Now this asset has become a significant part of the new financial world.

What other potential outcomes should I consider besides a crash to zero?

In addition to the complete сrash of the crypto market as such, a myriad of miners will be forced to stop their activities. This will entail curling and complete closure of hundreds of firms, causing a planetary scale of unemployment. For this to happen, BTC would have to be virtually wiped off the face of the earth including banning all Bitcoin transactions worldwide, shutting down all miners, pools, and mining farms, and finding and destroying all devices that store the Bitcoin blockchain history.

Disclaimer: Please keep in mind that the content of this article is not financial or investing advice. The information provided is the author’s opinion only and should not be considered as direct recommendations for trading or investment. Any article reader or website visitor should consider multiple viewpoints and become familiar with all local regulations before cryptocurrency investment. We do not make any warranties about reliability and accuracy of this information.