"Exactly a year ago bitcoin cost 20 thousand USD. It fell from the record-breaking level and today it is worth six times less. Has the most popular cryptocurrency reached the bottom?" asks Bartosz Grejner, Conotoxia Analyst.
On Friday, bitcoin price on many markets fell to about 3.2 thousand USD. This was the lowest value since mid-September last year. On Monday afternoon, the price rose to 3.5 thousand dollars. However, this is far less than, for example, in mid-November, when we recorded a value of 6.5 thousand dollars. Not to mention the price of exactly 12 months ago, when the cost of bitcoin exceeded 20 thousand dollars on many exchanges.
Year of unfulfilled hopes and collapse
What happened over the last year? Many factors caused the decline. These include spectacular attacks by hackers, stricter regulations or a ban on cryptocurrency trading in some countries, but also a lack of regulations and financial instruments increasing the involvement of financial institutions in cryptocurrencies. The main reason for the drastic bitcoin depreciation, as well as other virtual currencies, can be reduced to one thing: over-high expectations.
After the boom in the media, cryptocurrencies were announced as having a bright future. Estimates of bitcoin's value in the range of 50-100 thousand did not seem to be an abstraction, but a matter of time.
Excessive hopes quickly began to face reality. The commonly expected adaptation of cryptocurrencies into everyday use did not take place. Instead, hacker attacks, e.g. ransomware type, began. Losses reached hundreds of millions of dollars.
Currently, the chances for a return to growth do not depend on retail investors, but on institutional investors. For this to happen, the market would have to be more regulated, so that financial institutions would feel safe by transferring part of their funds from standard asset classes to cryptocurrencies. In this case, it is mainly the USA, for which the SEC is responsible.
Important promotion in the White House
Although the SEC is an independent state institution, there has been an important event for cryptocurrencies in the White House. President Donald Trump appointed Mick Mulvaney as the new Chief of Staff (from the beginning of 2019). Mulvaney is one of the people who actively worked on the founding of Blockchain Caucus in the US Congress. We are talking about a group of legislators dealing with legal changes in the context of cryptocurrency trading.
That's why the first quarter of next year may turn out to be better for both bitcoin and the other cryptocurrencies. Mulvaney will have practically no direct control over the new regulations. However, its impact may turn out to be small, but important stimulus which the cryptocurrency market needed to wake up from the stagnation.
