What Would Happen If Bitcoin Crashed to Zero?

Cryptocurrencies have made deadlines for several years now, and the value of Bitcoin, whose value was zero at its inception in 2009, reached a new all-time-high when it reached over $100,000 in December 2024.

Cryptocurrency deadlines have been extended for several years now, and the value of Bitcoin, which was zero at its 2009 launch, reached a new all-time-high when it crossed the $100,000 mark in December 2024. This article explores the hypothetical scenario of what would happen to investors and global finance if the price of Bitcoin crashed to zero someday.

The Growth of the Crypto Market

The expansion of the crypto industry from its 2009 inception to the present continues to surprise many. According to CoinMarketCap, from only Bitcoin in 2009, there are now over 11,000 different digital assets with a total market capitalization of over $3.76 trillion as of January 2025. Over 100 million unique crypto wallets are currently holding these digital assets, a number that has trebled since 2018.

Since it was introduced to the world by the mysterious Satoshi Nakamoto, Bitcoin, the first digital currency, has experienced a roller coaster ride, with the price fluctuating up and down due to external factors. Considering the volatile nature of the cryptocurrency market, where prices can move like a pendulum, it’s only natural that some people can speculate about the possibility of a total collapse of the global cryptosystem and the cost of Bitcoin crashing to zero. While this looks like a simple question, the answer requires a deep analysis of the context of the Bitcoin ecosystem to get an answer.   

What Factors Drive the Value of Bitcoin?

Unlike stablecoins that derive their value from tangible assets like the US dollar or gold reserves, the value of Bitcoin isn’t tied to any tangible asset, meaning you must understand the mechanics and factors that drive BTC and give it the value it has on the market. It appears that Bitcoin and other similar cryptocurrencies are vulnerable to significant price drops or hikes, which is why some people are afraid that it could someday crash in a matter of months or even days or minutes.

The historical performance of Bitcoin and other cryptocurrencies over the last few years has proved that crypto is subject to volatility. Moreover, several factors have impacted crypto positively or negatively. For example, Donald Trump’s statement in June 2021 that Bitcoin was a scam, or Tesla CEO Elon Musk’s announcement in May the same year that the firm would no longer accept payment in Bitcoin had the crypto lose at least 55% of its value from $57,352.77 to a low of $31,397.31.

On the positive side, Bitcoin’s value rose again later that year and hit a record $64,863 when El Salvador became the first country to declare BTC a legal tender. Enter regulatory changes, and in 2022, the value dropped again after cryptocurrency exchange Binance froze withdrawals following the collapse of cryptocurrency exchange FTX, and the value dropped to November 2020 at a yearly low of $16,195.59. Fast forward to July 2024, and Donald Trump’s remarks during a campaign rally in Nashville supported Bitcoin, and the price surge began culminating in the record-breaking figure of $108,000 in December 2024.

Can Bitcoin’s Price Really Crash to Zero?

In light of Bitcoin’s price fluctuating up and down due to external factors, it could reach a null state where the value of Bitcoin crashes to zero. While such an event isn’t likely to occur soon, we must investigate the factors that could hypothetically lead to Bitcoin becoming valueless.  So, technically speaking, the price of a cryptocurrency can crash to zero, as seen in the case of Terra Luna in 2022.

Some profound changes will need to occur for a digital asset as popular and valuable as Bitcoin to experience such a catastrophic drop in value. Some of the likely scenarios that could make it possible for the value of Bitcoin to crash to zero include the following:   

Lack of Intrinsic Value

Some critics argue that Bitcoin doesn’t have an intrinsic value. They suggest that if the entire world deemed the digital asset valueless, the price would fall as holders struggle to sell it back into government-issued currencies or other valuable assets. However, note that an asset’s worth lies in the perception of those willing to pay for it. For the price of bitcoin to crash to zero, all crypto enthusiasts would need to believe it’s valueless.

Bitcoin Gets Banned

The other scenario that could cause a catastrophic drop in Bitcoin’s value would be if all governments worldwide banned its use and made it illegal. Should it ever become illegal to own or use Bitcoin, the coin would lose most of its value in some countries. However, for the value of Bitcoin to crash to zero, governments worldwide would need to shut down mining activities worldwide. Only offline nodes of