You have to ask, was 2018 a dream? When it comes to the cryptocurrency space, it certainly felt that way. The space became vastly popular as it began to get traction from all sorts of investors. CNBC had a Bitcoin Watch ticker on the bottom right of the screen that kept up with the second-by-second price change. Various “experts” would provide their “insight” into the cryptocurrency space. Most famously, one suggesting that retail investors buy Ripple (XRP) essentially at its ATH price.
Looking back at the chart, you can say that in 2018 the Bitcoin Bubble burst. In 2018, the overall market capitalization of the overall cryptocurrency space went from just above $800 billion USD to $130 billion USD at the time of writing this article. That is more than an 80% drop in the overall market capitalization of the cryptocurrency space. This tops the dot-com bubble where we saw the NASDAQ drop about 78% in just two years.
Throughout the year, Bitcoin maintained its dominance – ranging between 35 – 52%. At the time of writing this article, Bitcoin remains the most dominant cryptocurrency, followed by Ripple (XRP) and Ethereum (ETH), – each with just about 10 – 12% of total market cap. We wrote extensively about Ripple (XRP) back when it was trading at $0.20 and most of our readers enjoyed a nice return of over 1000%. Ripple (XRP) is meant to be used as a facilitator of digital payments. While Ethereum (ETH) is a platform that allows for the creation of smart contracts. Ethereum (ETH) resulted in the creation of more 2000 different types of coins that we have today.
The fall of Bitcoin was attributed to various factors. The main of which was “Greed”. This unchecked greed resulted in a series of high profile hacks of various different cryptocurrency exchanges. This includes the $500 million USD Coincheck hack in Japan and the $40 million USD Coinrail hack in South Korea. Overall, there has been more than $780 million USD lost due to hacks in 2018 alone. In addition to the hacks, according to the Wall Street Journal, nearly 20% of all Initial Coin Offerings (ICOs) were fraudulent. This, along with the ongoing concerns regarding the reliability of Tether (USDT) as the stable-coin meant to be backed one-to-one by the US dollar.
There was also the ETF. The US government finally decided to take action and worked to bring some regulation to the cryptocurrency space. The Securities and Exchange Commision (SEC) denied the creation of BTC exchange-traded fund (ETF) due to concerns surrounding custody and surveillance of the underlying assets. This was not all, The the Commodity Futures Trading Commission (CFTC) demanded more transparency from BTC exchanges while looking into price manipulation of various cryptocurrency trading parties.
In 2018 (late 2017), we saw the creation of Bitcoin futures – and they showed some traction, however, trading volume continues to be an area of concern as they have only ticked up slightly in the last year. Various cryptocurrency trading funds were under pressure towards the end of the year as we saw many of them closing shop.
Despite this downward spiral, various banks have stated that they plan to create trading desks for the trading of cryptocurrency assets. Also, various banks in Asia and Latin America have shown interest in using Ripple’s technology. Furthermore, the Australian Securities Exchange’s (ASX.AX) announced that they plan to establish a blockchain-based platform to help facilitate the clearing and settlement of cash equities, in addition to other functions. The company has since delayed the implementation until 2021.
What to expect from Bitcoin and cryptocurrencies in 2019?
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