Bitcoin at its Lowest for 2018 This Weekend
Sunday turned out to be the worst day of 2018 for Bitcoin as its price plunged to the lowest it has been the entire year. According to data from Coinmarketcap, the world’s number one cryptocurrency dropped to a token price of $5,835.31 at 09:35 UTC on June 25, beating the year’s previous low of $5920.72 on February 6. This new low has brought the crypto’s decline from its December 2017 high of nearly $20,000 to 68%.
Reasons for the Decline
According to mainstream news agencies, this decline in the price of Bitcoin was due to the increased scrutiny from various financial bodies and regulatory authorities around the world.
One of the main reasons being cited is the BIS’s comments on the crypto market. The economic advisor as well as head of research for the BIS (Bank of International Settlements) in Switzerland announced that many cryptos may be able to be regulated just the way traditional stocks and bonds are. Earlier last week, the BIS had also released a report that stated that Bitcoin was not equipped to become a legal tender like other fiat currencies. This was because the cryptocurrency could not scale up to the volumes required or achieve store values of a legal tender.
Additionally, on Friday, June 22, the FSA – Japan’s financial watchdog – ordered 6 of the country’s largest crypto exchanges to upgrade their security measures to prevent money laundering. The FSA stated that these 6 companies had to submit their improvement plans by July 23.
Bitcoin is Not Dead
Despite the steady declines the digital asset has suffered this entire year, proponents of Bitcoin don’t believe that Bitcoin is dying or that the crypto may be reaching its end. BKCM LLC’s CEO, Brian Kelly stated that this was nowhere near the case and he gave multiple reasons to back his claim.
Firstly, Kelly stated that the crypto market sentiment is “approaching lows”, which means that a trend reversal is on its way. Additionally, while people have been focusing on BTC declining since its December 2017 high, the crypto is still trading above its November 2017 levels.
With regard to how the cryptocurrency market is affected by regulatory changes (he referred to the FSA’s orders to the 6 exchanges), he said that the short term would be rough, but in the long term, these regulatory changes would serve to make the market stronger.
Finally, Kelly also stated that since Mt.Gox’s bankruptcy proceedings have been converted to civil rehabilitation proceedings, huge amounts of BTC would no longer be dumped into the market – which had been pulling down prices further.
Current Status
As of Monday, June 25, the price of Bitcoin has rebounded, going up 5.6% at the time of writing to trade at a price of $6,162.36.