Bitcoin (BTC) hit a new 2018 low on Sunday, printing below the $5,800 area. The coin, which on Feb. 6 recorded a previous low of $5,920, has bounced back and is currently trading at $6,200 & change, up 5.11% over 24 hours with a market cap of $106.6 billion. The new low brings BTC’s decline from its all-time-high of almost $20k reached in December to nearly 70%.
According to Bloomberg, BTC’s recent downward trend reflects a combination of increased scrutiny in the cryptocurrency market by global central bankers raising questions about the coin’s staying power, multiple exchange hacks as well as a study claiming the highs of 2017 may have been artificially inflated..
Sunday’s dip and volatility comes also amid Japan’s Financial Services Agency’s new restrictions on six of its largest and best-funded cryptocurrency exchanges. On Friday, the regulator ordered the country’s top crypto marketplaces to improve their management systems with a specific focus on measures to prevent future money laundering and terrorist related activities.
Meanwhile, Bank for International Settlements or (BIS), an 88-year-old institution in Basel, Switzerland, recently said that bitcoin and other cryptocurrencies suffer from “a range of shortcomings” that will ultimately derail them from becoming a widely used method of payment and investment asset. BIS also said that cryptocurrencies are too unstable and subject to too much manipulation and fraud to ever serve as a key artery in the global economy and financial system.
Despite BIS’ warning, and in a move that’s likely to lend legitimacy to virtual currencies, institutions like Goldman Sachs (NYSE:GS) and the New York Stock Exchange (NYSE) are taking important steps to make cryptos accessible to their clients. In fact, the NYSE is currently working on its own bitcoin trading platform, while Goldman, which already clears trades for clients participating in CME and the CBOE bitcoin futures markets, has said it would open soon its own bitcoin trading operation.
It’s worth noting that despite the losses, bitcoin is still up by almost 135% on a year-over-year basis, and is more than 10x more valuable than its June 26, 2016 / $656 per BTC unit price. Additionally, the crypto’s decline and wild price fluctuations are decelerating, signs that imply the coin’s downside could become limited.