Recently, Bitcoin and other cryptocurrencies such as Ethereum and litecoin have risen to fame and popularity in world markets. However, in 2018, a significant correction crossed all cryptos, making the critics ask if the Bubble had burst.
Meteoritic History of Rises
Bitcoin and other digital currencies offer some, perhaps the most noteworthy features of high and quickly repeating ‘spike’ movements. Bitcoin was launched into the market in 2009, and over the years, it has been traded mainly by technology enthusiasts. However, 2017 saw massive mainstream adoption drive prices to unbelievable highs:
The Year Bitcoin Became Popular
Bitcoin began the year at well below $1,000 and progressively increased through 2017.
Bitcoin was now nearly $20,000 in December, making many “Bitcoin millionaires.”
Many new investors came into the crypto space to catch the up-and-coming move.
Similar to Bitcoin, other altcoins such as Ethereum, Litecoin, and Ripple recorded massive price gains due to the enhanced adoption rate and mere speculation. 2017 was an epochal year for cryptocurrencies, which helped to cement them as a genuine part of the popular conversation. The news on cryptocurrency was constant, and television business channels such as CNBC and Bloomberg started including crypto prices in their reports.
At some point, the Bubble looked invincible, and a marathon of wealth in Bitcoin could have gone on and on. But then it got worse…
The Long Collapse of 2018
The total market capitalization of cryptocurrencies reached $831 billion in January 2018, during the peak of the bitcoin craze. Then the decline started:
Cryptocurrency markets began in 2018 by erasing more than 65 per cent of value in the first two months.
Banking and financial backers for the world with this virtual facility also dropped below $7,000 by April after fluctuating near the $10,000 mark.
The contraction continued throughout the remainder of 2018 despite short recovery periods.
De facto, Bitcoin was barely going below $4,000 by the year ending, and the total market capitalization for all cryptos was below $130 billion.
One of the most remarkable periods in the Bulls’ history – 2017 – was completely wiped out. Many players who invested in the market just recently saw their positions sinking into deep red. Now, what shifted the odds in this manner?
The Nature And Reasons Of Crypto Crash
A variety of factors combined to take the air out of the crypto bubble:
Over-saturation and Speculation
Table of Contents:
1. Introduction
2. Affordable housing in the UK
3. Oversaturation of landlords on the market
4. Speculative building
5. Conclusion
Many participants with ‘2017-type’ gains came in without a fundamental belief in the technology powering the market.
Unfortunately, due to the ICO craze, there were a lot of poor-quality coins in circulation.
Crypto trading turned into more of a gamble for these enthusiasts.
Regulatory Changes
Countries like China and Korea used repression with stringent laws
Several agencies, including the SEC, intensified their pursuit and regulation of cryptocurrencies.
These include Facebook, Google, Twitter, and others that have banned crypto/ICO advertisements.
Security Issues
Mt Gox revelations bring significant Bitcoin sell pressure on the markets to repay its obligations.
Cybercriminals borrowed more than $500 million worth of digital currency in the first half of 2018
Previous large exchange hacks, such as the Coincheck attack, significantly dented consumers’ trust.
Although when Lithuania started to learn about cryptocurrencies, and it looked like the entire crypto market was sinking at the end of 2018, there is always a hope that institutional investments could turn the tide…
Is the Bubble Well and Truly Bursts This Time?
At this time, significant financial publications and internet forums were filled with talk of the crypto bubble bursting by the end of 2018. However, that has always been the case with cryptocurrencies, and prices have remained significantly above those in 2016. Some consultants and other representatives of different branches and industries who participated in the survey remained optimistic.
In 2019 and beyond, they predicted significant new developments might reignite widespread crypto adoption:
More comprehensive hedge-fund style analysis from institutional investors on Wall Street
FAANG companies, such as the social media giant Facebook, make cryptocurrencies.
Growth in the turnover volume of futures and ETF instruments
More increase in overall usage in developing countries
The Bubble has recently popped for various get-rich-quick schemers, but Bitcoin and blockchain technology appear far from disappearing from our lives.
Conclusion – Crypto Currency Still Shows Potential
The exhilaration of 2017 is long gone, but are the prices of cryptocurrencies back to reality, or are they still dreaming big?
The stock market and investment might have been discontinued, pushing hundreds of billions of dollars down, but the core crypto technology remains promising.
Bitcoin also introduced a novel Peer-to-peer electronic cash system and a new technological era.
Price stabilization could be needed once cryptocurrency is widely adopted by retailers/institutions.
MORE SO, further development of decentralized applications and new offerings of altcoins contain hope.
Bitcoin and many other cryptocurrencies are still revolutionary concepts for those wishing to look beyond their short-term investment potential. The Bubble has popped; the revolution has not ended. Only a time, it remains to be seen that the present price drop means just another opera of falling on the way to getting more acceptance.
Frequently Asked Questions
Time to Invest in Cryptocurrencies?
Maybe. Prices are significantly lower than the peak rate, which is considered to be a chance. Nevertheless, it remains possible always to observe risks and further declines. Cross-check with your lawyers and accountants before you invest.
What Was the Reason FOR the Rising Of the Crypto Bubble In 2017?
It gained rapid mainstream adoption mainly because, in 2017, interest and awareness of the technology increased significantly. More people got into the game out of fear of not participating and started making irrational decisions to become rich quickly, causing steep price movements.
How Far Can the Bitcoin Prices Drop?
No one truly knows. However, it may technically reach zero if LIMITED ADOPTION or other competing coins surpass it. However, at current, around $5000, there appears to be more upside than down, assuming there will also be more than $5,000 downside risk.
What has happened to Altcoins since the Bubble burst?
Amidst the low volatility of the majority of the altcoins from their all-time highs, there is still progress in the innovation and development of the altcoin market. However, as cryptocurrencies depict the formal asset class on the market, the differentiation between the altcoins provided will determine value and applications in the long term.
Can crypto markets get back to previous days’ highs?
Even the possibility of crypto prices moving back to the levels close to the highest at the end of 2017 is out of the question shortly. That said, the best +$800 billion market cap could be topped again in the next few years, depending on if institutional investments grow exponentially more or if new technical breakthroughs and blockchain uses appear. Though many analysts believe that the Bubble has burst with the advent of new genres and niches of cryptocurrencies, long-term enthusiasts still recognize considerable potential.
