Bitcoin Still Valuable Despite Losing Steam In Q1 2018Apr 05, 2018 at 6:25
The legacy Bitcoin may have lost half of its value in its worst first quarter performance, but the world’s largest cryptocurrency is still more valuable compared to the same period last year.
Data from CoinMarketCap—one of the largest resources for cryptocurrency market price—showed Bitcoin opened the year at $14,112.20 and closed the first quarter at $6,973.53, reflecting a 50.58 percent drop for the period.
The cryptocurrency also wiped out $119.91 billion in market cap during the quarter.
The end-March close also shows a 65.29 percent loss from the coin’s all-time high of $20,089.00 on December 17, 2017.
But despite the losses, Bitcoin proves to be valuable since its first quarter 2018 numbers is still a six-fold increase (550 percent) compared with the first quarter of 2017.
Bitcoin’s Worst Quarter Performance
To date, Bitcoin’s first quarter performance this year is its worst in its entire history.
CoinMarketCap has been tracking the cryptocurrency’s price since mid-2013. Its data showed that its next biggest decline was in the first quarter of 2014 where Bitcoin fell 39.47 percent.
A check with CoinDesk—which has been keeping tabs on Bitcoin since mid-2010—showed the same trend. In its history, the digital currency was also on the losing end during the first quarter of 2015 and of 2016.
2017 was the year Bitcoin saw a strong run up towards its peak price towards the end of the year.
But after hitting its peak in December, Bitcoin has struggled to break past the $11,000 to reach a new record with a slew of negative news that plagued the crypto market.
Proving to be a barrier to Bitcoin’s climb is the crackdown of several governments on cryptocurrencies due to their volatile nature, threats of tax evasion and their possible use in illegal activities.
At some point, some of these of governments shutdown or planned to ban the use of digital currencies in their respective territories. Others imposed regulations such as taxes
South Korea, for one, slapped 24.2 percent of corporate and local income taxes on cryptocurrency trading platforms. It also banned the use of aliases, allowing only real identities in crypto trading.
The US is also tightening its reins on unregistered cryptocurrency exchanges to protect investors and prevent fraudulent and manipulative trading practices.
Moreover, major banks in the US and UK have also banned their respective customers from buying digital currencies using their credit cards.
China also said it will continue to impose strict measures on cryptocurrencies to protect and strengthen Yuan.
There’s also the push to create international regulations for cryptocurrencies. The International Monetary Fund (IMF) said regulations should be focused on activities and not entities. The
Hacking And Illegal Trades
There were also cases of hacking during the quarter, most notable is the $530-million hack on Coincheck Inc., one of Japan’s largest cryptocurrency exchanges.
Hong Kong-based Binance also reported a hacking attempt on its platform and has offered a $250,000 bounty to anyone supplying information on the hackers behind the attack.
There’s also a growing threat in which cryptocurrencies are being used in illegal trades.
European Union Agency for Law Enforcement Cooperation (Europol) said cryptocurrencies have become avenues for criminals for their money laundering in Europe amounting to $5.5 billion
The Korea Customs Service (KCS), on the other hand, reported a total of 637.5 billion won foreign currency crime using cryptocurrency.
Still Room For Improvement
Despite the roller coaster ride in the first quarter, Bitcoin will continue its climb amid a speculative and volatile environment. There are 16,954,687 Bitcoins in circulation and still has a long way to go before it can reach its 21 million supply cap.
Some analysts are bullish on the prospects of Bitcoin while some are more on the conservative side.
Kay Van-Petersen, an analyst at Saxo Bank, told CNBC that Bitcoin could hit between $50,000 and $100,000 this year. He said Bitcoin has had a 50 percent pull back at one point and a correction is healthy.
In late 2016, Van-Petersen predicted that the legacy crypto would reach $2,000 in 2017. It did and went beyond the projection.
While Bitcoin is in a bearish mode in the short-term, Fundstrat Global Advisors managing partner Thomas Lee said it is a great entry period for the long term.
In a report by Reuters, Lee projects a new record high for Bitcoin by July, based on its 22 corrections since 2010.