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Crypto-currency – Combined Market Cap Collapses 72% to $236bn from $830bn Peak As Regulatory Concerns & Operational Issues Dog Sector
While Bitcoin (BTC, $6,633) is off -65% from its $19,205 peak, investors should note that the total cryptocurrency market has lost -$594bn (-72%) in value from its 2018 peak. However steep the decline, investors should also note that over the last year BTC is still up +233% from its 52-week low ($1,992). True to form for an emerging asset class, cryptocurrency is exhibiting the requisite volatility and investors should accordingly exercise proper caution. One particular issue accounting for the broader decline is U.S. regulators’ increased scrutiny of initial coin offering (ICO) activity with the FBI thought to have 130 separate investigations underway. Separately, the high energy requirements for cryptocurrency transaction verification, limited payment acceptance for cryptocurrency generally and incessant security breaches in both wallets and exchanges leading to substantial investor losses have further spurred regulatory concerns and tempered broader investor enthusiasm. These are all areas of substantial concern that need to be remedied before cryptocurrency sector values can recover appreciably.
Crypto-currency – Indicators of Possible Investor Interest Do Not Show Signs of Recovery At Present
We’ve been tracking BTC wallet growth and Google search term volumes since the start of 2018 as the cryptocurrency sector’s carnage has unfolded. The former is growing only slowly and the latter is in outright decline. BTC is ultimately a technology and without incremental adoption growth it may not find a bid until these indices stabilize.
Crypto-currency – While Cryptocurrency Sector Under Pressure, Interest In Blockchain Solutions Continues To Grow
BTC’s core system – the Blockchain – has never been hacked. In over 9 years of operation, BTC itself has remained secure. Thousands of miners keep the ledgers, each “block” cycling between unrelated parties running the same code to authenticate transactions to keep the system honest. This elegant genius of Blockchain along with the promise of greater transparency and efficiency is drawing growing organizational interest from a wide range of sectors. So, while 2018 to date may have seen a collapse in cryptocurrency market value, it is seeing rising interest in the practical application of the underlying technologies.