Bitcoin’s bearish year has, unfortunately, seen better days, especially since the cryptocurrency token’s value plunged over 12 percent, falling as low as $3,159.94 on the Bitstamp digital exchange. According to The Week’s article published on November 26, 2018, greater regulatory oversight could help the cryptocurrency industry rebound from their Black Friday weekend lows.
Token Volumes Fall Across Major Exchanges
Diar reported that, although cryptocurrency prices are falling 80-95 percent from the beginning of 2018, traders do not appear interested in purchasing Bitcoin with a bargain. The volume of tokens trading on popular exchanges is also falling significantly. Over 60 percent of the listed cryptocurrencies are now trading below their levels in January 2018.
The 20 percent of tokens that are listed on major exchanges currently experience less than 90 percent of trading volumes they had, back during the cryptocurrency hype in January. More than 50 percent of tokens are also considered dead as they have no more interested traders.
Although there’s a lot of uncertainty and doubt in the cryptocurrency industry, it isn’t Bitcoin’s worst crash. According to ABC News, in 2011, Bitcoin’s value fell 92 percent from $30 to $2.50. Between 2013 and 2015, after Bitcoin rose above the $1,000 US mark, the token’s value dropped by 84 percent. While Bitcoin has rebounded successfully from earlier crashes, Bloomberg noted that the cryptocurrency industry had lost over $700 billion in value since the peak of the cryptocurrency industry in January 2018.
Regulations Could Help the Market Bounce Back
Herbert Sim, the chief commercial officer from Cryptology, a Singapore-based digital currency exchange, however, believes that the market could bounce back if the government introduce robust rules and regulations.
He mentioned to Forbes:
“Regulators need to put standards in place to separate the weeds from the rises in the cryptocurrency world [if the market is] to move forward and investor confidence to settle. Having oversight of the cryptocurrency Wild West will legitimise, and subsequently stabilise the industry, which will allow it to reach the next step of maturity.”
Bitcoin Miners Switch Off Equipment
Despite, such optimism, cryptocurrency miners have also begun switching off equipment as they wait for the next opportunity where cryptocurrency values increase. According to Diar, miners need a 30 to 45 percent gross profit margin to remain online. Although miners tend to earn a 56 percent average gross margin, with the recent decline in Bitcoin’s value, the margin fell to 39 percent last week, forcing 20 percent of miners to turn off their equipment.