Bitcoin’s 2018 crash is nearing dot-com levels, as hundreds of other virtual coins are at or nearing zero.
Following a regulatory crackdown and recent hacks, bitcoin prices have slumped to lows not seen for months, with the popular cryptocurrency dipping just below $5,800 on Friday (June 29).
Bitcoin hasn’t reached that level since the middle of last November. Overall, the cryptocurrency has plummeted about 60 percent this year, after an atmospheric rise of over 1,100 percent in 2017.
The fall comes as financial regulators in Japan mandated stricter anti-money laundering practices for multiple crypto exchanges. In addition, two crypto exchanges in South Korea, Coinrail and Bithumb, have experienced large hacks in the past two weeks.
According to Bloomberg, this latest plunge brings bitcoin one step closer to matching the Nasdaq Composite Index’s 78 percent peak-to-trough plunge after the bursting of the U.S. dot-com bubble.
In the meantime, other coins, including Ether and Litecoin, have fallen even more, with the combined value of the tokens currently at $236 billion. At their peak, they were worth about $830 billion.
Lesser-known tokens have experienced an even worse fate: Dead Coins lists around 800 that are effectively worth nothing, while Coinopsy says the count is at more than 1,000. In fact, fewer than 4 percent of coins with market caps from $50 million to $100 million were successful or promising, according to recent analysis from ICO advisory firm Satis Group.
While bitcoin may not hit zero, it’s “very much” a bubble, said Robert Shiller, the Nobel Laureate economist, adding that last year’s surge was “not a rational response."
Still, authorities like Allianz Chief Economic Advisor Mohamed El-Erian said bitcoin is getting to the price point where it might be worth buying: $5,000. As he told CNBC, “I don’t think you get all the way back to $20,000, but I do think that you need to establish a base whereby the people who really believe in the future of bitcoin consolidate, and then that provides you a lift.”