Many people are wondering what is happening in the cryptocurrency world. It was just a few weeks ago when Bitcoin was trailblazing up to the skies. It managed to command a price of $20,089. This was quite astronomical given that the cryptocurrency was going for $886 on January 27th, 2017. The rise of the Bitcoin together with that of many other cryptos made is possible for the crypto market to enjoy a market cap of over $500 billion.
When the cryptocurrencies and especially Bitcoin’s price was surging, many new investors jumped in. This made the demand for the cryptos to go up exponentially. It seems that by the end of December, almost everyone who wanted to rip a profit from cryptocurrency was already in the boat. When the SEC announced that CBOE and CME would be licensed to list Bitcoin futures, there wasn’t a lot of concern in the market. While some investors saw the possibility of crypto market suffering, many believed that this was a good thing.
What made the price of Bitcoin slide in Jan 2018?
Regulators have been challenging the very core of cryptocurrency – anonymity, and decentralization. When Securities and Exchanges Commission (SEC) Chairman Jay Clayton said in a congressional hearing that he believes that every ICO is a securities sale and the agency has regulatory oversight authority, the crypto market steadied. When the U.S lawmakers started debating on the importance of regulating cryptocurrency, about half a trillion dollars was lost due to the ensuing sell-off.
Tuesday’s hearings came after the General Manager of Bank for International Settlements, Agustin Carstens, said that there is a strong case for authorities to reign in alternative currencies. According to Carstens, the regulatory role should be left to the central banks, tax offices, finance ministries and financial market regulators. He added that while Bitcoin may have been intended to be an alternative payment system which had no government influence, it had grown to become a ‘combination of a bubble, a Ponzi scheme, and an environmental disaster because of the electricity used’.
How has Bitcoin performed in 2018?
Since the year started, crypto coins have lost a huge chunk of their value. This is mainly blamed on the governments’ clamp down. Because of the loss of value, the banks which had embraced cryptos started shying away and credit card issuers stopped purchases using altcoins. In addition, investors got concerned that 2017s meteoric rise in alternative currencies was not justified. The cryptos’ frantic selloff coincided with a disturbance in global equities.
At the start of the year, Bitcoin was going for $14,245 and market cap stood at $240 billion. Even though the price rose to reach a high of $17,000, it has been downhill since. On February 6th the coin reached an all-low of $6,048 since December 2017. There was some recovery on February 7th when the price touched $7,725 at 1000 (CET) time. The market cap is currently $130 billion.
Will Bitcoin come back up?
For now, Bitcoin has to endure the news coming from central banks, regulatory agencies, and governments. The incessant hacking by North Korea on South Korea crypto exchanges and accounts is also a bad thing for the crypto market globally. It seems, however, the prices of the BTC, Ethereum and other major cryptos are recovering for now. The long-term performance of the cryptos will be clearly determined when the regulatory bodies have had their say and the prices have been readjusted accordingly.