Bitcoin during its peak in mid-December of last year was able to hit near $20,000. During the start of last year, Bitcoin was only at around $1,000. But 2018 is a different story. Regulatory changes have caused the market to drop. With a bearish market, Bitcoin even dropped below $3,500.
The recent drop was caused by a number of factors. For instance, you have the recent Bitcoin Cash hard fork that disrupted the stability of Bitcoin at around $6,200 to $6,500. After this, a number of miners turned off their mining rigs simply because the value of Bitcoin can’t cover for the expenses anymore. And lastly, crypto investors were alarmed that the network’s hash rate has been dwindling.
$20 Billion in One Day
There were already critics celebrating such as Nouriel Roubini who think that this proves that the crypto market is really a bubble. However, Bitcoin recovered back above $4,300. Bitcoin spiked as much as 16% and was able to hit a high of $4,341.44.
In the last seven days, Bitcoin tanked by 35% and dropped below $3,500 for the first time since September of last year. It was down by 80% from its all-time high. And so far, it has been considered as one of the worst-ever bear markets in the ten-year history of Bitcoin.
Bitcoin isn’t the only one that had a good day. XRP also rallied and rose up by 12% while Ethereum which is now the third largest crypto was up by 14%. In just a matter of 24 hours, the entire crypto market was able to gain $20 billion.
If youa re going to ask Andy Bromberg who is the co-founder and president of CoinList, he believes that investors are “digging back in after the craziness of last week”. He also added that “Today’s rise is mostly a reaction to the precipitous drops last week and people thinking that may have been an overreaction”.
He further explained that since the crypto market is still relatively small, a large “buy” order can “kick off an avalanche”.
What’s Next for Bitcoin?
So what is next for Bitcoin? Brian Kelly who is the CEO of BKCM thinks that the “hash wars” coming to end has finally boosted Bitcoin. He said that “You’re seeing the bitcoin cash saga play itself out”. He also said that “People were funding a lot of that by selling bitcoin, so one element of sellers has left the market”. For Kelly, he believes that “people are starting to understand that this is a legitimate asset class”.
Will there be a bull run soon? Now, this is a question that everyone has in mind. Many are still hoping that institutional investors can make a huge difference in the current market. For SEC Chairman Jay Clayton, he mentioned that there are a number of issues that has to be resolved before the agency feels “comfortable” approving a Bitcoin ETF. So far, there were a number of rejections citing the possibility of price manipulation. Many are putting their hopes to a Bitcoin ETF since this could make it easier for institutional investors to enter the crypto market.