BTC despite recently surging, it still remains in the doldrums with its price being nearly 75 percent below last year’s ATH. On Nov. 25, 2018 Bitcoin recorded a 36 percent weekly drop (the second worst in its entire ten-year history).
- Past success of cryptocurrency mining
During Bitcoin’s early days, your ordinary computer would be suitable for mining Bitcoin, but then it turned into a massive international business. Eventually, the Bitcoin mining craze reached its boiling point in the first half of 2018 when profitability started to decline due to falling prices and increasing cryptocurrency mining difficulty.
- Regulatory roadblocks
The uncertainty around Bitcoin remains one of the main factors that hinder its growth. Many suggested that the SEC’s crackdown on two ICOs triggered a prolonging bearish trend that finally broke Bitcoin’s multi-week streak of stability.
- Infighting within the Bitcoin community
The everlasting scalability debate created a great schism in the Bitcoin community. First, there was a Bitcoin Cash hard fork. In November 2018, the division inside the Bitcoin Cash community also came to a head, which subsequently resulted in the creation of yet another hard fork – Bitcoin SV. The Bitcoin community infighting is obviously a disheartening sign for cryptocurrency investors who might be tempted to jump ship.
- FOMO turned into FUD
According to Oxford Capital, the unprecedented rise of Bitcoin was largely fueled by the populist movement. During their Thanksgiving dinners, numerous people would hear mesmerizing stories about how much money you can make in a snap because of the volatile asset class. Once the Bitcoin price started freefalling, the new investors found themselves in a panic mode, and the cryptocurrency massive sell-off intensified. Nevertheless, the number of ID-verified users has almost doubled in the market (from 18 to 35 mln).
Numerous technical indicators point to the fact that Bitcoin is massively oversold (after being equally overbought last December). That essentially means that the real market value of the flagship cryptocurrency is much higher, and the Bitcoin price could rise in the nearest future.
- Rampant market manipulations
Speaking of cryptocurrency’s nouveau riche, it is worth mentioning that just over 1,600 investors (commonly known as ‘cryptocurrency whales’) control almost a third of the whole cryptocurrency market. Hence, these powerful industry players can easily tip the scale in order to manipulate the price of Bitcoin.
- No institutional money
The launch of CBOE and CBF Bitcoin futures became the driving factor behind Bitcoin’s bull run. There were high hopes that institutional investors would dive into the nascent industry but that wasn’t the case. Back in July 2018, the Bitcoin price experienced a short-term pullback when there was mounting anticipation for the Bitcoin ETF approval. However, the Winklevoss brothers failed to get the green light from the SEC to launch their Bitcoin ETF.
However, the good thing about 2018 was that major institutional players in the likes of Fidelity are finally tossing their hats into the cryptocurrency ring. Earlier, Wall Street permabull Mike Novogratz predicted that 2019 will be the year of institutional money falling right into Bitcoin’s lap. Goldman Sachs and Coinbase already offer custody solutions for Bitcoin investors.