The 2018 crypto crash: the bubble that deflated

How far did prices fall in the 2018 crypto crash?

Bitcoin reached a new all-time high of $19,783.06 on 17 December 2017. On 22 December it fell below $11,000, a drop of 45% from the peak. Between 6 January and 6 February 2018 it lost about 65%. These first weeks set the tone for the year and gave the crash its name.

The decline continued after the first shock. In September 2018 cryptocurrencies as a group had collapsed 80% from their January 2018 peak. In November Bitcoin fell below $4,000, and on 7 December it briefly fell below $3,300. A low of around $3,100 followed in December, about 84% under the 2017 high.

What fed the 2017 run before the 2018 crypto crash?

Initial coin offerings powered much of the 2017 run. During 2017, ICOs raised billions of dollars globally, and a buyer could join a new project with a single transaction. Money flowed into a wide range of tokens, and every new listing widened the choice. Rising prices attracted more issuers, and more issuers attracted more buyers.

That loop works only while new money arrives. A price based on expectations needs a stream of new participants, and 2017 supplied one. The loop also hid a weakness: a price can outrun real use, and the gap shows only when the stream of buyers slows. A reader learns from this chapter to separate demand for a token from demand for the price chart.

How did regulators shape the 2018 crypto crash?

Regulation moved while prices climbed. In July 2017 the US SEC published its Report of Investigation on The DAO, which concluded that certain digital tokens offered in ICOs could qualify as securities under existing federal law. On 4 September 2017, seven Chinese financial regulators officially banned all ICOs within the People’s Republic of China.

These actions narrowed the funnel that had fed the run. After the boom, ICO fundraising volumes declined substantially amid regulatory enforcement and market contraction, and falling prices cut issuance further. The result was a feedback loop: lower prices meant fewer offerings, and fewer offerings meant fewer buyers. The crash and the end of easy fundraising arrived together.

Why was the 2018 crypto crash a slow deflation?

The fall unfolded in 3 phases. The first, from 17 December 2017 to 6 February 2018, was a sharp drop of about 65%. The second was a drift lower through the middle of the year, as the market lost the buyers who had bought the peak. The third was the November 2018 leg below $4,000.

A slow deflation behaves differently from a flash crash. Holders had weeks to sell, yet many waited for a rebound that took years. The pace also left time for funding to dry up quietly, one cancelled offering after another. The page shows why a fall that lasts 12 months can cost more than a fall that lasts 12 days.

What did the 2018 crypto crash do to Bitcoin’s total value?

Total value tells the story in dollars. In November 2018 Bitcoin’s total value fell below $100 billion, the first time since October 2017. The same market had stood far higher a year earlier, so the fall erased gains that took 12 months to build. A single price hides this, because value is price times supply.

Total value also helps compare cycles. A market that needs fewer new dollars to move is easier to push around in both directions. In 2018, thin buying power met a large supply of holders who had bought high. That imbalance explains why a modest wave of selling could push the price through support again and again.

How does the 2018 crypto crash differ from later falls?

The 2018 crash was a bubble deflating. Later falls added other mechanics: a liquidity shock in March 2020, a fall of about half within 5 weeks in 2021, a chain of company failures in 2022 and a one-day flush of leveraged positions in October 2025. In 2018 the main driver was a lack of new buyers.

This difference matters for risk. A bubble deflation gives time and shows signs such as slowing inflows. A leverage flush gives little time. Comparing the two helps a decision maker choose tools: a slow fall calls for position sizing and patience, while a fast fall calls for rules set before the event.

Which checks from the 2018 crypto crash still help today?

Four checks come straight from 2018. Compare the pace of price gains with the pace of new buyers. Ask what the token does apart from trading. Track regulatory changes that narrow funding routes. Measure the drawdown your plan can absorb. As of October 2026, each check takes minutes and needs only public data.

The EQOS Asia method page explains how checks like these become a score that you can recompute each quarter. A 30-minute pre-diagnostic applies the same logic to your own exposure. This page is general information, not investment advice, and it describes history without forecasting any date.

Frequently asked questions

About the author

Stéphane Jambu

President, EQOS Forecast Asia

Stéphane Jambu leads EQOS Forecast Asia and works as a consultant in e-commerce, search visibility, and AI. LinkedIn profile