📉 [Analysis] The bitcoin flash crash to $0.01 in June 2011 - BitMEX Research

In June 2011, Bitcoin ($BTC) experienced a flash price crash on notorious exchange Mt. Gox, dropping from a $32 to $0.01 per coin. While the true reason is unknown or undisclosed, the best speculation points toward a hacking of previous Mt. Gox owner Jed McCaleb's administrative account and ensuing account manipulation. Once the hacker had the account, they transferred hoards of coins to themselves. To ship them out, the hacker had to sneak under the $1,000 withdrawal limit which was accomplished by dropping a large supply of Bitcoin onto the Mt. Gox exchange. A Bitcoin withdrawal limit that most users were not aware of saved the account, as the hacker escaped with only about 2,000 coins. After the hack, rolling back orders became a contentious debate along with the solvency of the exchange. The entire fiasco was settled with on-chain transactions conducted by Mt. Gox the following July to prove reserves. The flash crash only foreshadowed larger problems down the line.