A look into Bitcoin’s troubled year
Last year, Bitcoin seemed nearly unstoppable. The world’s most popular cryptocurrency rose to just under $20,000 and saw people investing heavily in the cryptocurrency rather that be through buying directly or simply buying the hardware needed to mine it. This, in turn, saw GPUs rise to absurdly high prices though Nvidia largely downplayed Bitcoin’s role in the company’s fortunes. This year, however, has seen the cryptocurrency’s fortune’s take a turn for the worst.
Currently, the coin is valued at $6,331, according to CoinDesk, but, on the 28th, it fell as low as $5,800 which is the lowest the coin has been this year. Even this month’s highest price point of more than $7,300 is still nearly $10,000 lower than it was near the beginning of this year when the coin was still worth more than $17,000.
Along with declining prices has came a decline in consumer interest in the currency. Looking at Google Trends search data, we can see that the currency hit its peak search popularity during the week of January 14th and fell off rather sharply since that time period. The first couple of weeks of June appear to be the coin’s low point in terms of search popularity, but the coin’s rebound has been a sluggish one. Using Google’s own scale, we can see that it recently hit a low point of 13 in terms of search interest and is currently hovering around 18.
It is difficult to say rather the low value led to a loss of consumer interest or the other way around. More than likely, it is a mixture of multiple factors that have led to the coin’s decline. Chief among them are a number of recent hacks which have seen cryptocurrency exchanges lose millions of dollars in coins. While Bitcoin itself was rarely the target of these hacks, they likely shook consumer confidence in the security of cryptocurrencies especially considering the fact that there is no central organization to insure such currencies.
Of course, just because the government isn’t insuring Bitcoin and other cryptocurrencies, doesn’t mean it isn’t willing to tax and regulate it. This year, the IRS announced it would begin taxing Bitcoin. In a lot of ways, it seems that Bitcoin is assuming many of the risks of being an unregulated currency while losing many of the benefits in regards to taxation and oversight. It’s too soon to declare Bitcoin or cryptocurrencies “dead,” but many experts are advising investors to use caution when considering the currency.
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