November’s price crash: the biggest cryptocurrency story of 2018

We take a look at the biggest stories in the crypto world during 2018, starting with the price crash that took place in November…

One of the biggest crypto stories of the year was undoubtedly the recent drop in price for cryptocurrencies that led to widespread panic within the community. While some of this hand-wringing may have been unfounded, it shook the industry and forced many to make some hard judgements.

At one point, Bitcoin lost around a third of its value within a week’s time period, causing Bloomberg analysts to declare the coin “no longer boring” in response. According to the team, the crash was caused by the pump for the Bitcoin Cash hard fork a few weeks prior, subsequently causing crypto values to plummet.

Come November 26, Bitcoin’s value had fallen by more than 80 per cent since its value peaked in December 2017-January 2018, with its market capitalisation falling below $100 billion for the first time since October the previous year.

It soon became clear that the consequences of the crash would be far-reaching, with some Bitcoin miners in China and Sweden forced to shut down mining farms because of the dip in profitability. Simply put, due to the price crash, the very expensive mining process had become more expensive than it was worth.

Staff layoffs at social media firm Steemit were also attributed to the crash, with three quarters of its workforce let go because of increasingly challenging market conditions.

CEO and founder Ned Scott said of the move: “While we were building out our team over the last many months we have been relying on projections of basically a higher bottom for the market. And since that’s no longer there, we’ve been forced to lay off more than 70 per cent of our organisation and begin restructuring.”

Crypto enthusiast John McAfee was one voice that came out on the side of calm, as he urged everyone to look ahead to the ‘glorious spring’ that would follow the current crypto winter.

In a colourful tweet he said: “People have panicked. But there’s no fucking need. We’re in a bear market. They suck, yes, and not like a hooker with no teeth. But I’m 73 and have seen this dozens of times in many markets. Bear markets are like Winter. It’s always followed by a glorious Spring. Fucking relax.”

Lou Kerner, Crypto Oracle executive partner, also chimed in with words of encouragement, comparing crypto in its current state to Amazon during and after the dot-com boom: “If you go back to the internet bubble, which is what a lot of us in crypto look at for direction, Amazon, arguably one of the greatest companies in the history of mankind, was down over 95 per cent over two years.

“Crypto has been so weak because most of it there’s no underlying value outside of confidence. But Bitcoin, itself, we think is going to replace gold eventually… It won’t happen overnight.”

And more recently forecasts have been more positive, with crypto expert Mike Kayamori telling investors to just hold on until the market turns, with the “equilibrium” drawing near. After this, prices will begin to climb again, he said, but it’s clear that the ‘crypto winter’ will stick in the minds of the community for some time.

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