By Elton Gomes
Cryptocurrencies resumed their downward slide on Monday, with Bitcoin falling towards $5,000 in the wake of a split of one of the largest major tokens. Bitcoin touched an October 2017 low, and was trading at $5,235.17 at 8.50 am in London, according to consolidated Bloomberg pricing.
Rival coins, including Ether and Litecoin, were also on the decline, as the wider Bloomberg Galaxy Crypto Index fell as much as 6.9 percent to a one year-low on a closing basis. XRP, the token associated with Ripple, was the only gainer among major digital currencies.
Cryptocurrencies volatile again
As cryptocurrencies continue their decline, it seems that volatility has returned, with the largest tokens shedding billions in market value since Bitcoin Cash debuted last week. The cryptocurrency industry has now lost more than $670 billion in value after peaking in January, according to data from CoinMarketCap.com. The data reveals that Bitcoin is down more than 70 percent from its December 2017 high.
Thomas J. Lee, managing partner at Fundstrat Global Advisors and a long-time crypto bull, drastically reduced his year-end price target for Bitcoin to $15,000 from $25,000.
What is the bitcoin system?
Bitcoin is a form of money that does not really exist. Bitcoin is not currency you can hold in your hand. Its not recognized by most stores, neither is it issued or backed by a national government.
The original software for a bitcoin system was laid out in a white paper in 2008 by a person or group of people using the pseudonym Satoshi Nakamoto. Nakamotos true identity remains unknown, despite several efforts to assign or claim credit. The primary idea behind bitcoin was the blockchain. The blockchain is a publicly visible, largely anonymous online ledger that records bitcoin transactions.
What led to a surge in bitcoin’s prices?
New investors put a lot of money behind bitcoin, thereby causing a surge. Bitcoins rates could reach additional heights after CME Group and other exchanges plan to offer bitcoin futures contracts, thus expanding bitcoins appeal. The fact that bitcoins software guarantees that there will be a finite supply has added to the fear of missing out in some investors and trading enthusiasts.
As of June 2017, there were about 16 million people who owned bitcoin, while more than 14 million people had wallets with bitcoin.
Bitcoin prices in India
The growth story of cryptocurrency has seen its share of optimists and sceptics. While optimists expected the rise of bitcoin price to grow constantly, sceptics dismissed the growth as mere mania.
As of June 2018, bitcoin prices dropped over two-third of its value from $19,600 in December 2017 to near $6,000 in June this year. Cryptocurrencies are yet to find substantial takers in India, since the Reserve Bank of India told banks to not entertain entities dealing in cryptocurrencies. However, the decision was challenged in the Supreme Court, which will decide upon the next course of action.
From the highest level of $19,500 in December 2017, the price of bitcoin fell to $6,450 in June 2018. Though 2018 seems to be a forgettable year for cryptocurrencies, bitcoin recorded phenomenal growth in 2017 after demonstrating growth over 1400 percent.
Elton Gomes is a staff writer at Qrius