Today marks the fifth anniversary of the "March 12 incident" in the cryptocurrency world. Remembering the events of that year still feels vivid. I have some spare time to review it for new friends in the community, and it serves as a reminder for myself as well.

The starting date of the event was March 8, 2020.

At that time, the pandemic had just erupted globally. On that day, Bitcoin dropped from $9,200 to $8,300, and Ethereum fell from $250 to $210. Most people thought it was just a normal correction.

It wasn't until March 11 that the World Health Organization declared a global pandemic, and the U.S. stock market experienced its first circuit breaker. People in the crypto space began to panic, but no one expected things to get worse.

March 12, 'Black Thursday'.

At 6:30 PM, Bitcoin suddenly plummeted from $7,000, dropping 5% per minute, with the price crashing through $6,000 and $5,000 like sliding down a slide.

At 3 AM, when the price was stuck at $4,500, those wanting to buy the dip found that the exchanges had completely crashed—BitMEX directly unplugged and paused trading, while Binance and Huobi's pages were stuck in loading loops.

March 13, 'Black Friday'.

At 7 AM, Bitcoin, after a brief respite, collapsed again and plunged directly to $3,782. Ethereum fared even worse, dropping from $190 to $87 in two days.

This triggered a chain reaction of liquidations, with even those using 2x leverage getting liquidated. Some watched helplessly as their accounts went from $1 million to $0. The worst was a liquidation order of $58.32 million on Huobi.

After reviewing the market, the reasons are generally summarized as follows:

First, the COVID-19 pandemic had just erupted globally, with the U.S. stock market experiencing four circuit breakers in one week, and both gold and oil markets plummeting.

The second issue was the chain reaction of leveraged contract liquidations. At that time, many people borrowed money to trade cryptocurrencies (using leverage). When prices fell, the system automatically liquidated their positions, causing prices to drop even further, creating a vicious cycle.

The third issue was the exhaustion of liquidity at exchanges. During the crash, trading volumes surged, but exchanges were not prepared at all, leading to system crashes and withdrawals being paused. Users couldn't even stop their losses, further amplifying panic.

However, after the price dropped to $3,800, a turning point came. On the afternoon of March 13, mysterious funds suddenly entered the market, pulling the price back to $5,000 in two days. Two months later, the price returned to pre-pandemic levels and surged directly to $20,000 by the end of the year.

By 2021, Bitcoin soared to $69,000, Ethereum to $4,800, and even the SOL that had dropped significantly at the time rose by 580 times. Most people who bought in on March 12 became overnight millionaires.

The March 12 incident was a result of global financial turmoil triggered by the COVID-19 pandemic, the high leverage risk in the market, and the structural flaws of Bitcoin itself. Although it caused catastrophic shocks in the short term, it has become a turning point for the maturity of the crypto market and laid the groundwork for the subsequent bull market.

Recent market volatility has also been significant. Recalling this event serves to remind everyone that the most important thing in the cryptocurrency space is—survival.

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