Bitcoin was supposed to go mainstream in 2018. Then the price plunged.

Beaten down.
Beaten down.
Image: Reuters/Benoit Tessier
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Last winter, as bitcoin zoomed to $10,000, Mike Novogratz, a hedge-fund-manager-turned-crypto-investor, proclaimed that it could “easily” reach $40,000. Then, when bitcoin broke $11,000, antivirus software pioneer John McAfee boldly predicted $1 million bitcoin by 2020.

For one astonishing moment, when bitcoin exceeded $20,000 per coin in mid-December 2017, Novogratz and McAfee seemed prophetic. But while $1 million bitcoin by 2020 is still theoretically possible, the last year has cast serious doubts on their prognostication abilities.

Bitcoin’s price has been in steady decline since May and the cryptocurrency is now floundering below $4,000, an 80% fall from its peak. Its market cap has sunk from $327 billion to $66 billion over the last 12 months. Roughly speaking, it’s gone from the size of Exxon Mobil to about the size of FedEx.

If 2018 was the year bitcoin was supposed to make inroads toward widespread adoption, the falling price is just one signal the mainstreaming of bitcoin hasn’t happened.

Beyond bitcoin, it’s been a painful year for the crypto faithful. Since Jan. 1,  the collective market cap for all cryptocurrencies fell from $822 billion to $130 billion. That includes alternative cryptocurrencies and scam projects, as well as bitcoin offshoots, so it might not be the best representation of the bitcoin ecosystem.

Bitcoin’s network fundamentals also illustrate the 2018 decline.

According to BitInfoCharts, the number of bitcoin wallet addresses active daily has declined from 1.1 million in December 2017 to 450K. And the network lost about 1,500 nodes—the computers that connect to the bitcoin network—a 12% decline over the last year, according to Bitnodes.

Mining revenue, the money generated through compensation for securing the network, and the number of transactions confirmed per day have also fallen, suggesting that fewer people used bitcoin this year than last year. And per Google Trends, during 2018, bitcoin’s worldwide popularity score dropped from 100 to 18—another indication of its crushing descent.

Also in 2018, the US Securities and Exchange Commission did not approve a bitcoin exchange-traded fund. The long-awaited financial product would allow investors to own bitcoin without having to buy it themselves. An ETF might have brought a fresh wave of speculators and provided tacit endorsement of cryptocurrency as an asset class, but the SEC passed due to ongoing concerns about manipulation in the bitcoin spot market.

Meanwhile, existing financial products, like bitcoin futures, haven’t garnered much interest. “Institutional players have stayed on the bitcoin sidelines, and as long as they are, the futures contracts are likely not to generate substantial amounts of volume,” Craig Pirrong, a finance professor at the University of Houston, told Bloomberg in October.

In 2018, corporate acceptance of bitcoin was also a mixed bag. Microsoft resumed its bitcoin payment option in January, and Dish Network even added bitcoin cash—an offshoot of bitcoin—as a payment choice for its subscription television service. But this year, Expedia and Reddit also dropped support for bitcoin payments, and broader adoption by Starbucks turned out to be caffeinated hype.

Finally, as crypto-focused companies, like ConsenSys and Bitmain, lay off employees, it’s one more reminder that bitcoin’s price last year may have been just a blip on the radar. The year 2018 was supposed to be bitcoin’s victory lap. Instead, it’s looked more like a goodbye tour.