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Monthly archives "August 2018"

Is Bitcoin Over? 

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The worth of internet cryptocurrencies such as Bitcoin rose in recent years, with bitcoin chalking up a rise of over 1,500 per-cent from around $1,000 per coin to more than $18,000 between January and December. Since climbing to this fever pitch, though, the cryptocurrency market has lost almost three-quarters of its value, losing over $500b (£393bn) in a steep sell-off that puts the recent decline of the Turkish lira in the dark.

Bitcoin is in a downward spiral.

The price of a Bitcoin is now about $6,245, a 68 per-cent drop in recent months. Ethereum, the second-largest cryptocurrency, has suffered a similar slide. It is down over 80 per-cent from around $1,400 to $173 a coin over the same period. Lastly, Ripple, the third-largest, is down 92 per-cent, from around $3.20 a coin to $0.26.

Downward spiral

Experts say numerous factors drove the decline. One of the most critical is the refusal of the US regulators to approve a number of Exchange Traded Funds (ETFs) based on Bitcoin because of concerns over the security of exchanges.

Mark Ward, head of execution at Sanlam UK, said: “A lot was waiting on that ETF approval and it hasn’t come as the SEC just doesn’t think cryptocurrencies are secure enough for the mainstream currency.” This unwillingness was reinforced by the largest cryptocurrency hack on record: in January $534m was taken from Japanese exchange Coincheck, dwarfing the notorious hack on MountGox in 2014. Other raids recently are those on South Korean exchanges Coinrail and Bithumb, which lost £37m and $30m respectively.

Other noted factors for the crypto crash are the increasing price of mining the bigger currencies, many warnings from central banks, and a surge of selling among crypto entrepreneurs. Though, for some money specialists, really what we are seeing is the end of a trend.