Crypto’s Road to Recovery Is Paved With Obstacles

Crypto markets witnessed a sizable pullback on Sunday, as bitcoin lurched back below $3,600 and major altcoins registered slight to moderate declines. Although 2019 is shaping up to be a pivotal year for cryptocurrencies, the path to recovery is riddled with obstacles, chief among them being damaged investor sentiment and a myriad of regulatory issues.

Market Update

With the exception of Tron, all major cryptocurrencies have registered declines in the past 24 hours. Bitcoin, the largest digital asset by market cap and trading volume, swung back below $3,600 through the early part of Sunday. The bitcoin price reached a session low of $3,567.25, according to CoinMarketCap. At last check, it was down 0.3% at $3,595.25.

XRP fell 1.8% to $0.3111, where it was approaching several bearish technical confluences. This comes despite Ripple announcing it had sold $535.6 million worth of XRP last year.

Ethereum declined 1.9% to $114.89. Bitcoin cash was nursing a loss of 2.8% to trade at $123.97. The value of EOS fell 2.1% to $2.40.

After peaking north of $0.03, Tron was back trading around $0.0290, having gained 1.2%. TRX has gained a whopping 21.4% over the past seven days. Read more: TRX Price Explodes While Tron’s Justin Sun Implodes on CNBC; BTT Token Will Be ‘Hybrid’.

Outside the top ten, Binance Coin rose 1.9% to $7.12, compounding its weekly advanced to 9.4%. Monero was trading slightly higher at $46.13 and has now gained 4.4% over the past seven days.

The combined value of cryptocurrencies dropped nearly $4 billion on Sunday to reach a low of $118.1 billion. At last check, the market was valued near 119.3 billion.

Crypto Meltdown and Its After Effect

In a market largely driven by investor sentiment, the impact of ‘crypto meltdown 2018’ could prove more costly than previously imagined. That’s the general view of Patrick Springer, a former Morgan Stanley employee who recently joined crypto exchange Polybird as an adviser. In an exclusive interview with CCN, Springer said investors shouldn’t expect institutional adoption to kick start the next major recovery – at least not yet.

“The damage from the crypto meltdown in 2018 plus the numerous regulatory issues will take time for the market to digest,” he said, adding that “there is not a lot of incentive to be an aggressive first-mover.”

Some of the largest players within the cryptocurrency space are betting big on the rise of institutional traders. Coinbase, one of America’s largest crypto exchanges, recently announced further institutional support for bitcoin, Ethereum and Litecoin. This includes cross-border wire transfers for high-volume users in Asia, the U.K. and Europe.

Last year, Fidelity Investments published a whitepaper on crypto custody. Shortly thereafter, it was announced that Fidelity was among the biggest investors in the forthcoming ErisX exchange, which allows traders to access spot and futures contracts.

In Springer’s view, institutional adoption will be slow to materialize as the market contends with regulatory bottlenecks and a lack of tokenization of real assets. This means big banks and institutional investors are unlikely to take the reigns from retail traders anytime soon. Retail traders, including new market entrants, were the main drivers behind the 2017 bull market.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi