Crimson Crystal is the first-ever Quest item that you will get in the game. As you start the game, you will go inside the forest area and unlock your first statue of the seven. Once you resonate with the statue, get Anemo powers, and are about to travel into the forest, you will see a blue dragon flying over your head towards the forest. That Dragon is Dvalin,  and Paimon urges you to follow it into the heart of the forest. As you head inside, you will notice Venti near Dvalin, where soon you are caught, and they both leave the site. A Crimson Crystal is left behind, basically Dvalin's teardrop. It has a red shine around it, and once you obtain it, you will be able to purify it later. The purified crystal, Clear Dvalin Tear, is eventually used to repair the Holy Lyre der Himmel during an Archon quest, and that's where this item is put to use. Now, you will notice that this item will sit in your inventory for a long until you reach the Archon quest and use it on the Lyre. This means it's possible that the Quest items we have in our inventory may be used down the line in future updates.