2018 has been a turbulent year for bitcoin with the price going on a rollercoaster ride. After plummeting by over 60% from its all-time high in December, the most popular digital currency has somewhat rebounded to trade at around $11,000 in February, only to slip again and never return above the $10,000 mark since March 7th.
Many analysts have suggested the BTC price will go on another surge before the end of the year, with price predictions ranging from $15,000 to $25,000. One research company, however, does not feel confident the growth will be that significant and has recently cut its year-end BTC price by 17% from $15,000 to $12,500.
Stock analytics firm Trefis decreased their prediction due to the fact that “there has been a notable reduction in total transaction volume across exchanges.“ While BTC has slightly increased over the last days of May, it still fell sharply over the course of the whole month, dropping to monthly lows, after almost breaching the coveted $10,000 mark on May 5th.
According to their official statement, “The global cryptocurrency industry has seen a flurry of new developments since December. Many of these developments had a negative impact on the growth prospects of cryptocurrencies, like restrictions by banks on the use of credit cards to buy cryptocurrencies, and calls by financial regulators across the world for caution while investing in digital currencies.“
The company claims their Price Estimator tool has an accuracy rate of over 94% and takes two main factors into consideration: daily transaction volume and daily active users.
The company went into more detail to explain the BTC recovery in April and May, saying it was caused by major financial companies dipping their feet into the crypto waters. Goldman Sachs started the first cryptocurrency trading desk in the history of Wall Street, while New York Stock Exchange announced plans to open a bitcoin trading platform among other exciting announcements for the crypto sphere.
The good news increased the BTC price but the good times did not last long as another obstacle emerged soon after. The infamous and now-defunct Mt. Gox crypto exchange dumped over 8,200 BTC on existing exchanges, causing the prices to decrease once again. The reason behind the bitcoin price crash in March was exactly the same, as the Mt. Gox trustee dumped over 40,000 into the market.
This is of utmost importance, as the trustee is tasked to get rid of over 200,000 BTC as part of bankruptcy operations. The price of bitcoin will most likely slide alongside similar selloffs as they are scheduled to happen in the coming months. This expectation might be the reason behind the passive trading activity recently, as the monthly trading activity has dropped from $914 million in March 2018 to just $429 million in May 2018.
Numerous crypto aficionados are expecting for a BTC price surge with Fundstrat’s Thomas Lee saying it will reach $15,000 before the end of the year, while the outspoken crypto evangelist John McAfee even going as far as to claim that it will be $15,000 by the end of June.
While it is highly unlikely that McAfee’s prediction will prove to be correct, the BTC has gained slightly nonetheless, to trade around $7720 at press time.
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I have been following the crypto markets since mid 2017, just in time to witness the incredible surge of the digital asset industry. Fascinated by the potential of blockchain technology I’ve started to dig deeper and that’s how I ended up meeting the Toshi Times team. I hold a Political Science degree, therefore the crypto regulation development is particularly interesting for me. I’m also heavily involved with music, running my own label, a YouTube channel and working with distribution. People call blockchain the ‘Fourth Industrial Revolution’ and I believe it will change our daily lives in the coming years and we will have the front row seats to witness it.