Simply, yes…
The red-hot digital asset of 2017 plummeted to a rather pathetic $9,199.59 early last Wednesday morning.
The last time Bitcoin fell below the $10,000 mark was back in late-November of last year.
Bitcoin knocked a whopping 52% off its all-time high value of nearly $20,000 while a widespread cryptocurrency sell-off continues deepening.
Actually, more than $30 billion was completely wiped from the entire cryptocurrency market’s value in less than 24 hours.
Ethereum and Ripple — the second and third biggest digital assets respectively — are continuing to move lower, also.
According to CoinMarketCap data, Ethereum is trading almost 29% lower at $791.97 a coin. And Ripple fell 34% to about $0.91 per coin.
While 2017 was the year of intense crypto mania and media coverage, 2018 looks like it will be the year that finally pops the Bitcoin bubble once and for all.
It wasn’t even a year ago that the cryptocurrency traded for just a few hundred dollars apiece.
Now, with the current market climate, there are many reasons why Bitcoin could easily fall back to $1,000 or below.
The following appear to have dealt the fiercest blows…
Regulations Having the Biggest Impact
Before its inception, Bitcoin was specifically designed to be stateless, leaderless, and deregulated.
Ironically, the culprits of its latest and greatest plunge are state leaders…
Trading was booming in South Korea, but officials began clamping down on regulations late last month.
Before these latest regulations were set in place, South Korea accounted for 4% of Bitcoin’s trading volume, making it the third biggest market in the world for Bitcoin trades — behind Japan and the U.S.
The country banned opening anonymous virtual currency accounts and put in place new laws that give authorities the power to shut down existing digital currency exchanges.
Officials are currently weighing whether or not to halt trading on exchanges altogether.
South Korea said on Monday its plan to ban virtual coin exchanges hasn’t yet been finalized because government agencies are still in talks to decide how to regulate the market.
Exactly how it will do this remains unclear. But just the threat of action has been enough to drive a massive crypto sell-off across the entire global market.
Likewise in China, a senior banker stated that authorities should ban centralized trading of all virtual currencies and also prohibit individuals and businesses from providing related services.
China shut down exchanges operating on the mainland last year — a move that also sparked a sell-off.
Russia is even contemplating regulations, as well.
Last Tuesday, Russian President Vladimir Putin said even though the Russian Central Bank currently has sufficient powers, “in broad terms, legislative regulation will be definitely required in future.”
Dying as a Payment Option
To go along with its design of being stateless, leaderless, and deregulated, Bitcoin was intended to be used as an alternative currency to commonplace fiat money.
About six months ago, the news was littered with companies that were looking to integrate Bitcoin into their payment options system.
However, in the fast-paced cryptocurrency ecosystem, things have changed dramatically.
Now, there’s a host of companies either turning away from Bitcoin or doing a complete U-turn.
Microsoft recently announced that, after almost three years, it would stop accepting the cryptocurrency. Steam, a gaming platform, also canceled its use of Bitcoin as a payment option in early December 2017.
Their reasons resonated with the general consensus, citing high fees and incredible volatility as the main issues.
It’s not only those outside the crypto market, either. The North American Bitcoin Conference set to be held in Miami this week is no longer accepting Bitcoin for last-minute tickets.
For one, Bitcoin is slow and expensive to use, hardly making it a suitable alternative.
Bitcoin was having problems defining itself as a suitable currency alternative due to its very nature.
It’s been a bone of contention since its fees started averaging about $2. And now, with transactions costing upward of $20, people have started looking at Bitcoin as something other than a digital currency and more like digital gold.
It would seem that Bitcoin’s change in categorization to digital gold occurred when SegWit2x failed to launch and, thus, sent Bitcoin on a monster rally that made it end the year 13 times stronger than when it started.
Its difficulty in becoming established as a currency lies in the very fundamental nature of cryptocurrencies.
A successful SegWit2x would have helped in lowering transaction costs and speeding up the network, but it also probably would have caused Bitcoin’s value as a store of value to take a hit.
And with interest in Bitcoin being solely driven by the mainstream speculative acceptance, it seemed that the community was keen to instead move toward being so-called “digital gold.”
The speculation and mania are what drove Bitcoin to its astounding heights and fatal crash.
It’s too dangerous and volatile to be a legitimate currency any longer. And with companies starting to turn their backs on cryptocurrencies, the people seem content to just stick with the dollar…
The Bottom Line
Bitcoin has endured some of its bloodiest weeks ever — losing nearly half of its value in a frantic investor sell-off that has tested the resolve of even the most faithful supporters of the cryptocurrency.
And unfortunately for Bitcoin, things don’t look like they’ll be getting any better any time soon.
So yes, Bitcoin is indeed dying.
That’s all for now.
Until next time,
John Peterson
Pro Trader Today