At the end of each year we like to take a step back and see the big picture, to understand what the milestones of the year were and what defined it. 2018 has been all about cryptocurrencies: most brokers have started to offer Contracts For Difference (CFD) on Bitcoin and altcoins and people have fallen in love with this asset. However, all was not great for Bitcoin this year. Let’s take a closer look.
The Rise of the Bitcoin
To speak about this year we have to look back in late 2017. At that time, Bitcoin was seeing tremendous gains. And I mean HUGE! If you owned Bitcoin or any other crypto coin, watching CoinMarketCap.com was better than Game of Thrones. Everything was going up and up and only up, so you were watching your profits grow by the hour. Everybody wanted a piece of the action and it seemed there’s no stopping the Bitcoin train.
The demand for crypto was so high that big exchanges were closing their doors to new customers. Everywhere you looked you saw messages like – Sorry! We don’t accept new clients because we cannot cover the high demand. Of course, when there’s high demand for something, the price goes up and that’s exactly what happened to Bitcoin: the highest price I’ve seen was $20,000! At the beginning of 2017, it was about $1,000 and at the end: $20K. Ripple, which is the third highest cryptocurrency by market cap went from approximately $0.20 to $3.00! Like I said, everything was going to the Moon… but then it happened!
The Great Depression
Right as 2018 was starting, Bitcoin took a dive. It wasn’t anything unseen before, but each time it dipped, it always went back up. Not this time though. In early January, Bitcoin quickly dropped to $15,000 and ended the month at $10,000. Clearly, something was wrong because a 50% drop in one month cannot be taken lightly. By the beginning of April, the price was hovering around $6,700 and by June it reached a low at $5,800. Think about it: just 6 months prior, Bitcoin was reigning at $19K – $20K and now it was crashing.
The other cryptocurrencies weren’t doing any better. Ripple was back down around $0.20 from the previous high at $3.0, Ethereum dropped below $200 by mid-September 2018 from a high of around $1,300.
So what happened? I cannot pinpoint it exactly – probably no one can – but it was actually a combination of factors. For one, CoinMarketCap, which is the go-to source for market watching, decided to stop including Asian exchanges in their calculation. They aggregate prices from several sources (exchanges) and list the resulting price, but some Asian exchanges usually show a higher price for crypto than all others. This resulted in an “inflated” price on CoinMarketCap so when they stopped including these exchanges in the calculation, the price suddenly dropped and some people freaked out, resulting in them selling their crypto, which drove the price even lower.
Other reasons include a wave of hacks on several notable exchanges, some regulation issues, talks about banning Bitcoin and generally a negative sentiment surrounding cryptocurrencies. Lots of people flocked to Bitcoin and altcoins during the great rise of late 2017, investing without taking into account the risks. Obviously, they took a big blow during 2018 and when people lose money, they start to hate the investment vehicle – in this case, Bitcoin.
However, despite the whole negativity and the low price, cryptocurrency in general and Bitcoin in special remained on everyone’s minds and throughout 2018, this was a hot talking point. Yes, the crypto market is down, but it’s still one of the most fun places to be and the one people are currently interested in. It’s like crypto and blockchain have brought a new enthusiasm to people. Bitcoin is down? Ha, so what? In January 2017 it was at about $700 (yea, that’s a stat I haven’t given you yet), so if you look at it, Bitcoin is very much up. And if it could go from below $1K to $20K, what’s to stop it from going from the current $7K to $50K?
Where Are We Headed Next Year?
When summarizing 2018, you cannot miss it: it was the year of the Bitcoin even if the coin itself is down in price. People are talking about it, all CFD and Binary brokers are introducing it as an asset for trading and for most people, if a brokerage doesn’t have crypto trading, that’s a deal breaker.
Recognizing this fact, we’ve changed from covering only Binary Options to all around trading so now we bring you bitcoin scam busting as well, reviews and articles from all over the trading world, not only limited to binary. That’s why we rebranded from BinaryOptionsThatSuck to ThatSucks and throughout 2019 we will continue to warn you of possible scams and educate in more than one aspect of trading, including Bitcoin. As for cryptocurrency, I personally believe it will go up and that blockchain will be one step closer to mass adoption. But that’s just an opinion, don’t take my word for it.