{"id":93501,"date":"2025-08-25T01:09:07","date_gmt":"2025-08-25T01:09:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/93501\/"},"modified":"2025-08-25T01:09:07","modified_gmt":"2025-08-25T01:09:07","slug":"what-would-happen-if-bitcoin-totally-crashed","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/93501\/","title":{"rendered":"What Would Happen If Bitcoin Totally Crashed?"},"content":{"rendered":"

Bitcoin<\/a> now has a $2.31 trillion market cap, and it\u2019s sitting on the balance sheets of asset managers, institutions and even national treasuries. Millions of people hold it directly, and others are exposed through exchange-traded funds (ETFs), futures and retirement accounts.<\/p>\n

Read More: 13 Cheap Cryptocurrencies With the Highest Potential Upside for You<\/a><\/p>\n

Learn More: 6 Low-Risk Ways To Build Your Savings in 2025<\/a><\/p>\n

But what if the world\u2019s largest cryptocurrency all came crashing down? A total collapse wouldn\u2019t just hurt crypto investors. It\u2019d ripple through the entire economy. Below, experts weigh in on the potential fallout.<\/p>\n

Also see how much bitcoin to own in 2026, according to financial planners<\/a>.<\/p>\n

A Crisis Bigger Than 2008 Could Unfold<\/p>\n

A sharp drop in bitcoin\u2019s value<\/a> would hurt many investors, but a total collapse to zero would be in another league entirely. It\u2019s not just crypto investors who would take a hit. Bitcoin is now tied into the broader financial system in a way it wasn\u2019t just a few years ago. Large asset managers, pension funds and even some governments now hold bitcoin directly or through investment products.<\/p>\n

\u201cConsidering how embedded bitcoin now is in the global financial system, with the world\u2019s biggest asset manager holding $90 billion of the world\u2019s biggest cryptocurrency, if it were to crash to zero, we\u2019d see a crisis magnitudes bigger than 2008\/2009,\u201d said Kevin Rusher, founder of RAAC<\/a>.<\/p>\n

\u201cThe next crash will likely feel a lot worse, as the market is much bigger now, and we have many bitcoin derivatives such as exchange-traded funds and futures,\u201d said Vince Stanzione, founder of First Information and author of \u201cThe Millionaire Dropout<\/a>.\u201d<\/p>\n

Check Out: Coinbase Fees: Full Breakdown of How To Minimize Costs<\/a><\/p>\n

Younger Generations Could Lose Faith in Financial Markets<\/p>\n

Many people who hold bitcoin today are those in younger generations, often millennials and Gen Zers who see cryptocurrency as a main way to grow wealth. For some, bitcoin was their first real investment. If bitcoin were to crash, it could lead many of these younger investors to lose faith in financial markets. Instead of moving into other assets like stocks or bonds<\/a>, some might step away from investing entirely.<\/p>\n

\u201cStudies show that bitcoin investors (by the way, I don\u2019t like to refer to them as investors \u2014 more appropriately, they\u2019re speculators) tend to be younger than investors in stocks and bonds. One of the ripple effects of a bitcoin crash would be a loss in confidence in the financial markets by this younger demographic. When one loses confidence in a particular institution (like the financial markets), one often disengages from that activity,\u201d according to Robert Johnson, founder of Economic Index Associates<\/a>.<\/p>\n

While older generations might view a bitcoin crash<\/a> as validation of their traditional investment approach, younger investors might interpret it as proof that all financial markets are rigged against them.<\/p>\n

Retirement Security for Entire Generations at Risk<\/p>\n

Younger generations<\/a> tend to have more of their wealth tied up in crypto than older generations. That means bitcoin crashing could wipe out a larger share of their savings. <\/p>\n

\u201cA second ripple effect would be a decrease in retirement assets for the Gen Y and Gen Z generations, as these generations tend to have a greater concentration of their wealth in crypto than the baby boomers and Gen X,\u201d Johnson said.<\/p>\n

Regulation Would Face Massive Disruption<\/p>\n

A bitcoin crash could change the rules of the game for the entire crypto industry. When people lose large amounts of money, they often look for someone to blame. For bitcoin, that blame could fall on the companies that run exchanges, issue bitcoin-related investment products or manage funds that hold bitcoin. If losses are severe, pressure could mount on lawmakers and regulators to step in.<\/p>\n

\u201cThe ripple effects will likely be more regulation<\/a>, as investors that lose money will seek to blame the brokers, exchanges and issuers such as BlackRock. Those investors that also thought they were \u2018rich on paper\u2019 will have to face the reality that their newfound wealth has evaporated,\u201d Stanzione said.<\/p>\n

More From GOBankingRates<\/p>\n

This article originally appeared on
\n GOBankingRates.com<\/a>:
\n What Would Happen If Bitcoin Totally Crashed?<\/a><\/p>\n

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.<\/p>\n","protected":false},"excerpt":{"rendered":"Bitcoin now has a $2.31 trillion market cap, and it\u2019s sitting on the balance sheets of asset managers,…\n","protected":false},"author":2,"featured_media":93502,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,63,99,171],"class_list":{"0":"post-93501","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-markets"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/93501","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=93501"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/93501\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/93502"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=93501"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=93501"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=93501"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}