Bitcoin, the largest digital currency by market value, lost more than 70% in 2018, notching its worst-ever annual performance. Believe it or not, some cryptocurrency market observers believe there were silver linings in 2018 for bitcoin.
While bitcoin’s current levels are well off its lows for 2018, some market observer’s believe the prospects for a bitcoin rally in 2019 are murky.
Until the cryptocurrency that was once the toast of the town can resuscitate itself and get out of its latest correction, it calls to mind market bubbles of the past that elevated investors into a state of euphoria before unceremoniously popping and crashing down to earth.
“Infrastructure underpinning the world’s leading cryptocurrency bitcoin is looking better even though its value has fallen by more than 80 percent since the peak, argues prominent cryptocurrency software engineer Jameson Lopp,” reports CCN.
Improvements to the blockchain and other crypto infrastructure as well as increased adoption of the asset class by high-level investors could bolster digital assets.
What’s Next
Heading into 2019, the outlook for bitcoin and rival cryptocurrencies remains murky due in large part to increased regulatory efforts and lack of mainstream adoption.
Among the issues plaguing bitcoin this year are the ongoing unwillingness of U.S. regulators to approve bitcoin-related exchange traded funds as well as data indicating that mainstream acceptance and adoption of the digital currency are declining.
Lopp’s “report noted that value of every BTC transaction, which had peaked at over $100,000, declined by 90 percent in 2019 to $10,000. It nearly reversed the trend that had started when BTC/USD was trading at $4,000 in 2017. The data noted that the network’s average UTXO, which stands for the unspent output from bitcoin transactions, also lowered from the 2017 average of 30 BTC to 13 BTC in 2018,” according to CCN.
While bitcoin and the broader cryptocurrency space tumbled last year, cryptocurrency as an asset class did attract new investments.
“Despite a bearish makeover, bitcoin and its sister markets continued to attract more investments than they did in the previous years,” reports CCN. “Venture capital funding into the crypto space grew almost fourfold in 2018, from $876.28 million to $3.127 billion. It ensured that trust in the potential of blockchain did not fade even though 90 percent of companies that wanted to create a blockchain-enabled product failed.”
For more information on the cryptocurrency market, visit the Bitcoin category.