Bitcoin crashed to a new 2018 low of less than £4,531 ($6,000) on 24 June, far below its $20,000 peak of December 2017.
About The Crash
Very much of this downward trend for Bitcoin reflects wider investor concerns about cryptocurrency.
It has been the subject of a lot of negative news in recent months, including details of a severe hack on a cryptocurrency exchange in South Korea and a research study claiming the 2017 Bitcoin price hikes could have been artificially inflated.
The hack on Bithumb, an exchange based in Seoul, resulted in theft of $30mm, and this is the second major hack on a South Korean exchange to happen in June.
Bitcoin’s price crash affected other major cryptos, including Bitcoin Cash, Ethereum, and Ripple, which all dropped by up to 20% in the preceding week. Although there were some gains between 3% and 10% on trading conducted on June 25th.
Bitcoin was trading at its lowest prices since November 2017 on 24 June, although early investors who bought the cryptocurrency prior to June 2017 will still have made profits of 150% on their purchase.
Marcus Rupsys, a US-based digital currency investor, said: “Statistically Bitcoin has been in bear market for a while“.
While Scott Weatherill, who’s the chief risk manager at B2C2 Japan commented that: “Exchange volumes continue to languish and Google search trend statistics show that search volumes for ‘bitcoin’ sit at just 10% of the heights witnessed at the peak of the mania in December“.
Apparently investors should expect massive price fluctuations in cryptocurrency as it’s such an emerging market.
Matthew Newton, an analyst with trading platform eToro, said: “The reality is that emerging technologies carrying radically new ideas will always see swings in their value. Market adjustments as we have seen over the past months can help to stabilise prices and move the industry towards a more robust, sophisticated regime. This is good for the long-term future of blockchain and cryptocurrencies, giving the industry time to develop“.
As if to prove the point, Bitcoin has bounced from those late June to $6000 levels, and now sit around $8000. These vast swings create opportunity – but from regulation in Japan, to heavy institutional investments – the price drivers are often sudden and dramatic.
Both risk and reward are magnified in the current crypto markets.