Bitcoin last year was able to reach almost $20,000. Starting 2017 at around $1,000, speculation and investors’ fear of missing out has led to its rise. However, 2018 was a different story. Bitcoin is currently trading below $6,000 and is already closing into losing 60% of its value this year. Hitting $5,799, Bitcoin was able to hit its lowest price since November.
Japan’s Strict Implementation
The reality is that there is no single event that caused Bitcoin to drop this far. In reality, it is an accumulation of negative incidents ranging from hacks to regulatory changes. However, Japan’s Financial Regulator recently ordered crypto exchanges to follow the new rules and improve practices that are against money laundering and protecting investors from hacking incidents. And Japanese regulators are quite serious as there are already crypto exchanges that have been affected by this move.
And also, you have recent hacking incidences that may have scared off investors. Two South Korean exchanges experienced hacking incidents in less than two weeks. Both Coinrail and Bithumb were victimized by hackers taking away a large sum of money from its investors.
Is It The End?
A lot of investors are asking whether or not this is already the end for Bitcoin. Before you even make a conclusion, it is a good idea to take a closer look at different factors. For instance, you have to take into consideration the reality that Bitcoin is dealing with high transaction fees and long transaction times. People are spending $20 and even $50 per transaction.
You also have to consider that there is the scrutiny that ICOs are experiencing. And with increased scrutiny by SEC on ICOs, there is also lesser interest on the part of cryptocurrencies including Bitcoin despite the fact that both Ethereum and Bitcoin were considered by the SEC as commodities.
According to Brian Kelly who works as CEO of BKCM, he said that “The market is not reacting to any positive news, but the news flow has been quite positive”. Kelly mentioned that Bitcoin and Ethereum being considered as commodities by the US Securities and Exchange Commission is a good thing.
As for Matthey Newton who works as an analyst for eToro, he considered this drop in Bitcoin’s price normal since the futures settlement date is getting near. He also said that there is lack of excitement these days which reflect on the trading volume in the crypto market. He said that “There’s no real spark in the market right now to get it moving, it’s just more sellers than buyers”. He also added that “It needs something to get market back to life, like some development on the technology or regulatory side”.
It isn’t just Bitcoin that is suffering from losses. In fact, Ethereum, Litecion, Bitcoin Cash, as well as Ripple are all down.
Does it mean that Bitcoin has lost its charm? There are experts that have a bullish outlook on Bitcoin. In fact, there are even some of those who predict that Bitcoin is going to reach mid-$5,000 before going up again.