One year since crypto peaked and it all looks very different
Since cryptocurrency markets hit a market cap high of $830 billion a year ago they have fallen by 85% and the dominance of Bitcoin may be the problem
Exactly a year ago, on January 8, cryptocurrency markets reached their all-time high. Twelve months later and things are looking very different.
According to analytics website Coinmarketcap.com the total market capitalization for all crypto assets on January 8, 2018 reached a summit of $830 billion. Exactly one year on and the sector has a total market capitalization of around $135 billion total, which marks a loss of around 85% in 12 months. A veritable crash, in anyone’s book.
Bitcoin has led the ebbs and flows of the entire industry as it serves as the digital bellwether for price actions of many of the other crypto tokens. This appears to be one of the primary issues with the industry as a whole at the moment – when Bitcoin dips, the rest dump, and vice versa.
Even though many other crypto assets such as Ethereum serve an entirely different purpose to Bitcoin, they still seem to be hopelessly coupled to it. The rise in popularity of stablecoins such as Tether for use in trading pairs has not been enough to reduce Bitcoin’s dominance over market actions and sentiment.
Bitcoin’s loss over the past 12 months is 80%, so the market as a whole has fared worse as altcoins have suffered greater pains, with some losing over 95% from their peaks. At the moment BTC is trading at $4,000 and facing heavy resistance, so it may well spend a prolonged period there, or even fall back again to $3,000 or lower.
Naysayers and doom merchants such as American economist Nouriel Roubini have consistently called Bitcoin and digital assets a scam and, looking at last year’s performance, most would be inclined to agree.
Crypto still far bigger since 2017
However, going back further paints a different picture again, as in January 2017 the cryptocurrency industry was only worth around $14 billion. So, even at today’s low levels in the middle of a bear market, crypto assets have surged over 865% in two years.
Bitcoin itself was trading at around $900 this time two years ago, so those that timed their investments right would have made 340% in two years, no bank on the planet can come close to that.
Some analysts have predicted the end of the downturn and that 2019 will be a brighter year for crypto assets. What 2018 has shown us, as in previous years, is that Bitcoin and cryptocurrencies are still highly volatile assets. Crashes of over 80% have occurred several times during Bitcoin’s short 10-year lifespan and there are likely to be more ahead.