Since the start of 2017, cryptocurrency had a remarkable run. That was, until January of 2018.
As good a year as 2017 was for the alternative monetary system, 2018 is equally as bad. Thus far, the market gave back all of the gains made in the serious run up last year.
Looking from the all-time highs, Ripple is down 89%, Ethereum rings in at 76%, and Bitcoin at 67%. Many of the other alt-coins fared much worse.
When we look at the charts and see it graphically, the point is driven home.
Many millions were made by the run up in the cryptocurrency prices. Those who got in early, and sold, ended up making a fortune. This is what usually happens with bubbles. Now people are questioning whether this entire segment will bounce back.
At the core of a lot of this is the mining costs. Ethereum has dropped to the point where it is no longer economical to mine. When the cost of hardware is factored in, miners are taking a loss on each coin generated. Some will claim that miners will keep mining because they believe the price will go back up. Maybe this will be the case. Still others say that the algorithm could be changed to make it easier to mine. Will that have the desired results?
The leads to the bigger question of the market leader: Bitcoin. Is it going to see a point where mining is not profitable? Some believe that it is impossible for that to happen. The price of Bitcoin cannot go below the mining costs. Then why did it happen to Ethereum?
There is a lot of uncertainty among these coins. The global consumption of electricity to generate these tokens is growing astronomically. If the profit potential is removed, will they continue to do it?
We also see many Bitcoin advocates promoting the idea of the Lightning Network. This is a total unknown. It might end up being the nirvana these seek but it is too early to tell. This is a grand experiment (all of cryptocurrency is really).
Where does the market go from here? That is the question everyone is asking.
Here is more on this subject.
