Only 12 months ago, the price of bitcoin was piercing the $ 10,000 mark, with some particularly bullish investors blithely predicting it would eventually top $ 100,000. What a difference can be made: 2018 may go down as the year cryptocurrency mania died.
Bitcoin prices on Monday traded at $ 3,768, according to CoinDesk. The best-known digital currency has lost 75 percent of its value this year. Roughly $ 670 billion in 2018 halo, date from CoinMarketCap show.
Over the hype
A number of factors have torpedoed cryptocurrencies. Underlying the business fundamentals, the most important is the speculative nature of the investment.
Bitcoin and other digital currencies that fueled their growth into bubble territory is nowadays that bitcoin has turned the corner into a decade of existence without replacing cash or other forms of payments. Titans of industry including JPMorgan Chase CEO Jamie Dimon has derided cryptocurrencies as a scam, while Berkshire Hathaway's Warren Buffett has said he does not look bitcoin as a genuine investment.
This month, when bitcoin fell below $ 6,000 on a "hard fork" worries that with the emergence of a bitcoin alternatives known as as bitcoin cash. The fallout between two software-development factions over the offshoot effectively led to a computing arms race, causing some investors to bail on digital currencies.
On the part of cryptocurrency miners, who produces new digital coins by solving complicated mathematical equations. The level of computing activity related to miners – otherwise known as the hash rate – has recently started dropping off, according to published reports.
Regulators crack down
Digital currency market, fanned by recent finances levied by the Italian Securities and Exchange Commission against two cryptocurrency companies The head of the SEC last year warned about investors
But some remain optimistic even as cryptocurrency prices head south.
Fred Wilson, an early bitcoin investor and partner at Union Square Ventures in New York, in a digital currency to the dot-com bubble, which he called "a brutal period during which our belief in the internet and its potential was sorely tested. "
But tech stocks including Amazon that were hammered after the bubble burst eventually bounced back, with the big paydays not arriving until 2010 and beyond. Wilson thinks that scenario that will likely repeat with crypto assets.
Still, "I think, predicting tighter industry scrutiny ahead. "Regulators came after the internet sector", and that seems likely to happen in the crypto sector too. "
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