Find Us

Bitcoin: World's largest cryptocurrency takes a dive

 Representation of the Bitcoin virtual currency
Representation of the Bitcoin virtual currency Copyright REUTERSREUTERS
Copyright REUTERS
By Angela Barnes
Published on Updated
Share this articleComments
Share this articleClose Button

The world's largest cryptocurrency, Bitcoin, has dropped to its lowest level in more than a year.


The world's largest cryptocurrency has suffered its biggest losses in more than a year.

Bitcoin (BTC) tumbled more than 7.5% on Tuesday to below $4,500 (€3,900) BTC=BTSP, knocking nearly a third off its value.

It comes as other cryptocurrencies also fell this week.

Ripple's XRP, the second largest cryptocurrency by market capitalisation, fell 5% on Monday, while Ethereum's ether dropped more than 13%, according to data on

So what is behind the crypto crash?

Kevin Murcko, CEO of crypto exchange CoinMetro, told Euronews that Bitcoin's peak price was always destined to drop. 

"All cryptos are nascent assets; speculation, rather than the usefulness of the technology or the underlying asset, is what’s mostly been driving price movement since its inception.

"Fuelled by media hype and the conviction amongst the public that crypto was a way to get-rich-quick, the asset class rocketed from almost nothing to over $800 billion at its peak. That price point, quite obviously, was unsustainable," he said.

He explained that we are now seeing the fallout of a bubble driven almost entirely by financial speculation, rather than the quality or usefulness of the underlying technology.

"Dumb money brought the crypto boom, and dumb money is to blame for the crypto crash. This sell-off was long overdue and is almost certainly not the conclusion to this bearish market," he added.

Market psychology is a factor too, he said. "Fear is a tremendous motivator, and it’s what we’re seeing now reflected in prices. Market fear is cumulative. Selling encourages more selling. Nobody wants to be left with their BTC at $1."

To reverse this bear market, he said we need to see new value — in other words, more real-world use cases of businesses and people actually using the underlying asset.

"This will bring new buyers, new eyes, and will generate renewed demand. For a recovery to happen after the initial bubble burst, you need to show a correlation between the price of the asset and the practical value of the asset," he said.

José Maria Macedo, head of advisory at AmaZix, told Euronews that one contributor that not many people are talking about is crypto fund redemptions.

"A lot of crypto funds were launched in October and November last year during the bubble. The one-year lock-up period, after which investors can redeem their money, is now expiring.

"Given the market performance over the last year, we can expect that these funds have been dealing with a high volume of redemptions, leading to forced sell-offs, which has contributed to the current price drop.

"I expect that this will continue into the beginning of 2019," he said.

Are cryptocurrencies still a good investment for the future?

Murcko's answer to this — yes.

"Crypto will be a good investment in the future. In fact, I believe that the crypto crash has largely been a good thing for the market," he told Euronews.


"Crypto is an immature market. During the boom, we saw bad actors, overpriced assets, and fraud. Things won’t be returning there ever again. Regulators will ensure that’s the reality.

"This crash is normal. It happened with the internet bubble, the mortgage bubble, the energy bubble and so on. Markets filter themselves and what we’re seeing now with crypto is a natural cycle."

He explained that just because there is a crash, it does not mean there is no value.

"What old school analyst saw tangible value in the internet? What investors came back and increased their portfolio after the crash in companies like Amazon and Google?" he added.

Share this articleComments

You might also like

Explained: Why is blockchain regarded as revolutionary?

Bitcoin stock surpasses €55,000 mark

Indonesia is rapidly asserting itself as a formidable presence on the global stage