The bears have been out in force throughout 2018, and they’re not done yet. The overall Bitcoin price hit a four-month low yesterday due to multiple issues.
2018 has not been a good year when looking at the overall Bitcoin price. The number one cryptocurrency by market cap reached almost $20,000 back in mid-December 2017, but this year has been one for the bears.
Down, Down, Down
Bitcoin hit a fourth-month low in price yesterday, coming in at $6,006. A lot of people predicted that the cryptocurrency’s value would rise a number of times this year, such as after the Consensus conference, but those predictions have come to naught so far.
Some have claimed that there are multiple issues pushing the downward Bitcoin price. There have been a couple of exchange hacks this year, with Coinrail being targeted first and, most recently, Bithumb in South Korea.
Another possible factor is that once crypto-friendly Japan has been putting the regulatory screws on exchanges. After the Coincheck hack of roughly $530 million, the Japanese Financial Services Agency has gotten really aggressive in mandating much higher standards, causing a number of exchanges to withdraw their applications and one to be outright denied a license to operate.
Cardstock director Chris Tse notes:
Often swings in prices are blamed on events like hacks of crypto exchanges, or news from regulators.
If the crypto market were a NASCAR race – there would be a yellow caution flag waving right now. There was massive exuberance, then a massive crash, and now we’re cleaning up the debris and figuring out what’s going on
Myriad of Issues
It’s not just the hacking of cryptocurrency exchanges that have put a dampener on the Bitcoin price. Tom Lee of Fundstrat Global Advisors says that there hasn’t been enough demand from retail and institutional investors to pump up the price. Lee says that regulatory moves by the Securities and Exchange Commission have acted as a wet blanket in regards to this expected enthusiasm.
The SEC has taken needed steps in 2018, targeting ICO (initial coin offerings) scams, but the uncertainty around which projects are securities versus commodities has created substantial uncertainty.
Of course, it could be that the value of Bitcoin hit an unnatural high last year as everyone and their neighbor got caught up in the hype and jumped onto the cryptocurrency bandwagon. It could also be legitimate growing pains as virtual currencies continue to find their way in the world and are slowly codified and regulated by national governments.
There is some trend analysis that projects the current misery will continue throughout the year. But there those that are more optimistic. John McAfee says that the price of Bitcoin will hit $15,000, while Tom Lee projects the coin to reach $25,000 sometime in 2022.
While it is true that Bitcoin has dropped to just over $6,000, it should be remembered that its value was roughly $1,000 at the start of 2017.
Do you think the price of Bitcoin will stay around $6,000? Will it go up, or will it go down? Let us know in the comments below.
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