The Year In Cryptocurrency: Bitcoin's Burst, Hackers, Rejections, Regulations And More

After a huge year that put cryptocurrency on the radar of mainstream investors for the first time in 2017, 2018 was disastrous for investors. The crypto community can’t wait for Jan. 1, 2019 to roll around so it can start forgetting about 2018.

Here’s a look at some of the headlines that were moving the cryptocurrency market this year and which currencies were on the move.

Headlines

The biggest crypto headline of 2018 was the massive amount of value that was sucked out of the market this year.

The cryptocurrency market lost roughly $700 billion in total market cap this year as the 2017 bubble burst and traders took what profits they could. The market cap of bitcoin alone dropped from $220.9 billion as of Dec. 31, 2017 to just $66.3 billion today.

One of the main causes of concern for cryptocurrency investors this year was persistent security issues in the industry. While blockchain supporters argue in favor of the security of the currencies themselves, CipherTrace reported in Q3 that the cryptocurrency market was on pace for roughly $1.2 billion in theft this year thanks to vulnerabilities in wallets, platforms and exchanges.

Japanese exchange Coincheck lost $530 million in cryptocurrency to a hacker this year, while criminals made off with $195 million in currency from BitGrail.

Another thorn in the side of the crypto industry in 2018 was regulation. It's possible the most impactful of the new regulations may have been responsible for the end of the bitcoin bubble. In January, global cryptocurrency trading hub South Korea banned anonymous cryptocurrency trading for the first time.

In the U.S., online advertising giants Alphabet, Inc. GOOG GOOGL and Facebook, Inc. FB both banned all cryptocurrency advertising on their platform in early 2018 in an effort to protect their users. Both companies eventually reversed their blanket crypto bans, allowing only a limited number of pre-approved crypto-related advertisements.

Yet another year has come and gone without the Securities and Exchange Commission approving a cryptocurrency ETF. The SEC issued another round of rejections and delays to crypto ETF applications, citing concerns over custody, market liquidity and investor safety.

At the same time, a new bill introduced by Congress in December called the “Token Taxonomy Act” would explicitly exclude cryptocurrencies from securities laws, potentially paving the way for regulatory clarity in 2019 and beyond.

Such a horrendous year for crypto prices certainly left cryptocurrency experts and analysts with a bit of egg on their faces.

Among the most egregiously off-base 2018 price projections include that of Fundstrat Global Advisors analyst Tom Lee, who called for a year-end 2018 bitcoin price of $25,000. Saxo Bank analyst Kay Van-Petersen said back in January that bitcoin prices could hit $100,000 by the end of the year.

Of course, bitcoin still has one more year to hit tech guru John McAfee’s 2020 price target of $1 million.

Price Action

The Bitcoin Investment Trust GBTC traded at $9.63 this week, down 80.8 percent on the year.

Here’s how several top crypto investments fared in 2018. Prices are as of Dec. 27 and reflect year-to-date changes.

• Bitcoin declined 72.5 percent to $3,781;
• XRP declined 82.5 percent to 36 cents;
• Ethereum declined 82.8 percent to $125;
• Bitcoin Cash declined 93.3 percent to $164;
• EOS declined 67.7 percent to $2.50.

The three cryptocurrencies among the top 200 largest crypto market caps that have made the biggest gains in 2018 are:

• Smartlands: $16.3-million market cap, 1,136.6-percent gain.
• Hydro: $12.6-million market cap, 1,043.4-percent gain.
• Vitae: $12.7-million market cap, 558.6-percent gain.

The three cryptocurrencies hit hardest in 2018 were:

• Ignis: $12.2-million market cap, 99.8-percent decline.
• BOScoin: $26.5-million market cap, 98.8-percent decline.
• SALT: $18.7-million market cap, 98.3-percent decline.

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