The Champ May be Down for the Count
Bitcoin’s performance this year shows how the quicker you ascend, the harder you fall. Starting at around $17,000/coin at the start of the year, its present value is $3,416 representing almost an 80% decline. The godfather of blockchain itself has been on a constant trend of digression throughout 2018.
Benjamin Bitcoin: Growing Backwards with Age
Bitcoin’s market cap was virtually stagnant for years until the end of 2017. In hopes of increasing block size, Bitcoin Cash and Bitcoin Core underwent a hard fork that split its original genesis block into two. From than on out, sibling chains were created and adopted by the two platforms. We saw the market cap surge in upwards of $18,000/coin towards the end of last year. However, the hype was shortlived and dipped below 5 figures last February. Bitcoin’s plunge fluctuated until September than remained motionless the following 3 months. Since November, its value was the lowest it’s been in 7 years without a pulse of optimism in sight.
How Could the Crypto King Fall Off?
On the surface, the domain of cryptocurrencies have become over saturated and abused. Bitcoin has been privy to shady altcoin enterprises, thefts, hackings, and even allegations of fraud. Countless ICOs have occurred under the radar resulting in losses of millions of dollars for investors. In addition, with dozens of crypto assets being birthed daily, Bitcoin is no longer a distinct or even innovative model. Large-scale mining operations were forced to shut down as the spurt of altcoins came into full effect. Pressure from regulators such as the IRS and the SEC have also played a role in Bitcoin’s chaotic nature this year. Rising interest rates was another contributing factor. Despite the risk for investors, it is predicted a high number of taxpayers will report their bitcoin losses in attempt to offset further tax liabilities.
Bitcoin’s Future: Upsides to the Downfall
All of the potential benefits that may bloom from this travesty won’t happen until later down the line. As of now, the SEC has taken a firm position on restricting much of the activity surrounding ICOs. However, the reigns will loosen as bitcoin and the few altcoins remaining become integrated into the financial and social paradigm. In fact, a report by A.T. Kearny predicts bitcoin will reemerge with nearly two-thirds of the crypto market in 2019.
Ironically, for cryptocurrencies to see a third decade, the only viable path forward involves this acceptance by the international financial system that Bitcoin once sought to defeat.
On another note, the challenges of block hashing has decreased tremendously which will cause stable mining firms to gain coins easier than ever before. Regardless of the miners that have went under this year, it is simply freeing up space for the strongest to survive. Blockchain counsel with BakerHostetler, Robert A. Musiala Jr., claims,
…we’re now seeing efficient Bitcoin mining firms making more money as the inefficient firms are going bankrupt.
2018 was a Tragedy Forged with Good Intents
Sure, in theory, the hard fork served its purpose and the mission behind bitcoin remains noble. However, the legislative tug-a-war between crypto and conventional institutions are changing the economic landscape. It is more than likely that bitcoin will recover as the top dog of blockchain as it’s the most widely-recognized cryptocurrency in the world. Anything you feel passionate about regarding bitcoin’s performance in 2018? Predictions for next year? Drop us a note and let us know.