Bitcoin price hits 2018 low but cryptocurrency market shows signs of recovery

Anthony Cuthbertson

Bitcoin has crashed below $6,000 (£4,531) to reach its lowest value in almost eight months, as investors continue to react to recent allegations of price manipulation.

The world's most valuable cryptocurrency dropped to $5,826 on Sunday, 24 June, according to CoinMarketCap, but has since seen a modest recovery to return above $6,000.

The price fall was reflected across the cryptocurrency markets, with ethereum, bitcoin cash and ripple all dropping by between 10 and 20 per cent over the last week. All of the major cryptocurrencies have seen slight price gains of between 3 and 10 percent over the last 24 hours.

The latest price low means bitcoin is now trading at less than a third of its 2017 peak, which saw the cryptocurrency spike close to $20,000 in December.

The recent downward trend is a reflection of investors' current sentiment, which has been hit by negative news that includes a major hack on a South Korean cryptocurrency exchange and a study that claims the highs of 2017 may have been artificially inflated.

The $30 million theft from the Seoul-based Bithumb exchange last week was the second time this month that a cryptocurrency exchange in South Korea has been hit by hackers, following the successful targeting of the Coinrail exchange on 10 June. Both instances resulted in the price of bitcoin and other virtual currencies to drop.

The price of bitcoin briefly dipped below $6,000 before recovering slightly (CoinMarketCap)

The cryptocurrency price fluctuations are to be expected with such a nascent market, according to Matthew Newton, an analyst at the trading platform eToro.

“The reality is that emerging technologies carrying radically new ideas will always see swings in their value," Mr Newton told The Independent.

"Market adjustments as we have seen over the past months can help to stabilise prices and move the industry towards a more robust, sophisticated regime. This is good for the long-term future of blockchain and [cryptocurrencies], giving the industry time to develop.”

Cryptocurrency markets mirrored bitcoin's latest drop in value, which fell below $6,000 for the first time this year (AFP/Getty Images)

Other factors that may have contributed to bitcoin's latest price tumble include new regulatory measures introduced in Japan on Friday, which could have a significant impact on cryptocurrency investment in the country.

Local exchange desk Bitflyer announced that it would stop accepting new customers due to new measures introduced by Japan's Financial Services Agency.

Despite the losses, bitcoin is still up by almost 150 per cent since this time last year, and is more than 10-times more valuable than its June 2016 price.