Definition ∞ A token crash signifies a rapid and substantial decline in the market value of a digital token. This precipitous drop in price can be triggered by various factors, including negative market sentiment, the discovery of critical vulnerabilities, regulatory actions, or the liquidation of large token holdings. Such events can lead to significant financial losses for token holders and impact the broader market. The swift depreciation marks a severe downturn.
Context ∞ Token crashes are often prominent news events that highlight the volatility inherent in the digital asset markets. Reports typically detail the precipitous price declines of specific tokens or cryptocurrencies, alongside analyses of the contributing factors and potential market repercussions. These occurrences underscore the speculative nature of many digital assets and the importance of risk management for investors.
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