Bitcoin, as well as smaller cryptocurrencies like XRP and ether, had a terrible November that saw $70 billion in value wiped off the market, CNBC reported on Friday.
Bitcoin closed at $3,878, well below $6,000, which proponents had long insisted was its “floor” but in retrospect appears to have been a magic number. That’s 80 percent lower than its December 2017 high of $19,783. As of early Saturday afternoon, it stands at around $4,230, though Genesis Global Trading CEO Michael Moro told the site it was “unclear if this is a ‘bottom’ or a brief period of consolidation before next move down... Buyers are still maintaining some cash on the sidelines in case it does go lower.”
According to CNBC, it’s been painful November for other major players in crypto as well:
The market capitalization of all major cryptocurrencies took a $70 billion hit for the month, according to CoinMarketCap.com. XRP, the world’s second largest cryptocurrency, dropped 18 percent in November while ether fell 43 percent in the same time period.
The world’s largest cryptocurrency began November at an average price across exchanges of $6,341, but as of 0:00 UTC on December 1 is trading at just $3,964, according to CoinDesk’s Bitcoin Price Index.
As it stands, the near $2,400 drop in bitcoin’s price has created a -37.4 percent monthly performance, which is its worst on record since August 2011, when it fell from roughly $8 to $4.80 to print a -40 percent monthly loss, according to data from the CoinDesk Bitcoin Price Index (BPI).
As Bloomberg noted earlier this month, it appears that many large-scale bitcoin miners threw in the towel throughout November, with JPMorgan Chase strategists writing in a report that “prices have declined to a point where mining is becoming uneconomical for some”:
The Bitcoin network’s hash rate, one way of gauging the computing power dedicated to mining the digital currency, dropped about 24 percent from an all-time high at the end of August through Nov. 24, according to Blockchain.com. While the decline may have partially resulted from miners switching to other cryptocurrencies, JPMorgan Chase & Co. says some in the industry are losing money after Bitcoin’s price tumbled.
Bitcoin miners use dedicated hardware to confirm transactions on the network, earning new bitcoins as a reward in the process. Even as prices fell throughout 2018, miners kept on expanding capacity through at least August. But the smaller players are being squeezed out; for example, Bloomberg noted that the break-even price for “Bitmain’s Antminer S9 rig was estimated at $7,000 in a Nov. 16 report by Fundstrat Global Advisors,” though in some countries with cheaper electricity it may be lower. Bloomberg wrote that some holdouts may ultimately benefit if enough smaller mining firms are forced out, “assuming Bitcoin’s price doesn’t fall too fast.”
As CNBC noted, there does remain some good signs for crypto: The Securities and Exchange Commission has increasingly sought to root out fraudsters and scams, while Intercontinental Exchange, Nasdaq, and VanEck are all planning to launch bitcoin futures in the coming months. The state of Ohio recently set up a system to let businesses pay taxes with cryptocurrency.