2018 has not been a good year for the cryptocurrency market.
Major tokens across the board have steadily plummeted over the course of the year, with investors losing faith in digital currencies’ ability to provide massive gains.
Bitcoin – the world’s largest cryptocurrency – was priced at over $16,500 at the beginning of 2018, while as of 6 December it has reached a low of $3,855.
The next-biggest cryptocurrency, Ethereum, has also suffered greatly since the beginning of the year.
Ethereum was valued at over $720 on 1 January 2018, while it is now worth around $100.
Speculative investors and day traders seem to be vacating the cryptocurrency space in the face of this long-term decline, which recently included the biggest monthly loss Bitcoin has experienced in seven years.
The euphoria surrounding cryptocurrencies in 2017 has slowly and steadily faded away, as the Bitcoin price graph for this year shows.
The price drops for the token in percentage terms are:
- January 2018 – $16,500
- December 2018 – $3,400
- Drop – 79%
- January 2018 – $880
- December 2018 – $94
- Drop – 89%
Many cryptocurrency owners or investors have questioned what this price change could mean for the future of digital currency.
With lower prices comes less frantic investment and less transaction volume on the blockchain networks themselves.
At the peak of the cryptocurrency craze, popular blockchains were straining to meet the demands of users and transaction fees skyrocketed.
The capacity and scalability of blockchain networks are continuously being improved by developers who are seemingly unfazed by the volatile price activity surrounding their creations, however, and it seems that blockchains like Ethereum and Bitcoin will be able to enjoy a quieter developer environment as speculative traders lose interest.
Of course, lower prices also mean less incentive to mine cryptocurrencies. Indirectly, this is how major price drops can impact the functionality and security of a major blockchain.
With miners leaving Bitcoin and Ethereum en masse, there is less total hash rate on these networks – meaning they are theoretically easier to attack.
This could change once proof of stake and other security measures are implemented, but for now the world’s major cryptocurrencies are beginning to resemble their pre-2017 selves – both in price and activity.