Bitcoin Finished Q1 2018 Below $7,000 After a 50.7% Retreat

Bitcoin finished the first quarter of 2018 below $7,000 after losing approximately half its value over three months, closing a sharp reversal from the speculative surge that culminated in December 2017.

CoinMarketCap’s March 31 UTC snapshot placed bitcoin at $6,973.53, compared with $14,156.44 in its December 31, 2017 snapshot. Using those two observations, Coinburn calculates a 50.74% decline. The calculation measures the change between CoinMarketCap’s December 31 and March 31 end-of-day observations; it is not an investor return adjusted for fees, spreads, taxes or the exact time of any individual trade.

Two records show the fragmented market

Kraken’s official March 31 daily market report marked bitcoin at $6,871, up 1.45% for that report’s daily interval, with $131 million traded in bitcoin across the exchange’s supported currencies. Kraken reported $217 million of trading across all of its markets.

Its December 31, 2017 report had marked bitcoin at $14,350. Comparing those two Kraken observations produces a 52.12% decline. That result differs from the CoinMarketCap calculation because cryptocurrency traded continuously across multiple exchanges and currency pairs. There was no consolidated closing auction or single official bitcoin price.

CoinMarketCap’s March 31 snapshot also estimated bitcoin’s market capitalization at $118.20 billion from a circulating supply of 16,950,475 BTC. Its reported 24-hour volume was $4.55 billion. Those figures were aggregated market estimates rather than audited accounts or trade-by-trade records, and market capitalization represented price multiplied by estimated circulating supply—not cash invested in the asset or money that could necessarily be withdrawn at the displayed price.

The contraction extended beyond bitcoin

The same CoinMarketCap snapshots show that the quarter’s losses were broad. Ether declined from $756.73 on December 31 to $396.46 on March 31, a Coinburn-calculated loss of 47.61%. XRP fell from $2.3006 to $0.5124, or 77.73%. Bitcoin cash dropped from $2,533.01 to $685.25, or 72.95%, while litecoin declined from $232.10 to $116.61, or 49.76%.

These comparisons use the assets’ displayed U.S.-dollar prices at the two UTC snapshots. They do not account for intraday highs and lows, venue-specific premiums, changing liquidity or the reliability of reported exchange volume. They nevertheless establish that the quarter-end weakness was not confined to bitcoin.

Bitcoin’s March 31 price was 0.63% above CoinMarketCap’s observation 24 hours earlier but remained 20.01% lower over seven days. The small daily gain therefore represented stabilization near the quarter’s lows, not a reversal of the three-month decline.

What could be said on March 31

Contemporaneous reporting had already identified several pressures surrounding the market. Bloomberg reported on March 30 that bitcoin had moved below $7,000 for the first time since early February and noted mounting regulatory scrutiny, cryptocurrency-advertising bans by major internet platforms and anticipated sales by the Mt. Gox bankruptcy trustee.

Those developments formed part of the event-day context, but the available records do not isolate a single cause for the quarter’s decline. Price changes across a global market reflected many orders, venues and expectations. Coinburn therefore treats the suggested explanations as contemporaneous interpretations rather than demonstrated transaction-level causation.

Later context

On April 3, CoinDesk’s review of its Bitcoin Price Index described Q1 2018 as bitcoin’s second-worst quarter in that index’s history, behind a reported 68% decline in Q3 2011. That ranking was published after the quarter closed and is included only as later confirmation of the move’s historical scale.