In early 2018, the cryptocurrency market experienced one of its most turbulent periods, marked by sharp declines across major digital assets. At the center of the storm was Bitcoin, which saw its price plummet to $7,360**—a significant drop below the critical **$7,500 threshold—according to data from Huobi, a leading digital asset trading platform at the time. This downward spiral not only signaled growing market uncertainty but also raised concerns about mining sustainability and investor confidence.
Market Reaction to the Price Drop
The falling Bitcoin price triggered a ripple effect across global financial markets, particularly affecting blockchain-related stocks. During pre-market trading in the U.S., several blockchain概念股 (concept stocks) declined sharply. TEUM dropped nearly 6%, while OSTK and KODK both fell close to 5%. This sell-off reflected a broader trend: as cryptocurrency values weakened, so too did the market sentiment toward companies associated with blockchain technology.
👉 Discover how market trends influence digital asset performance today.
However, not all news was bearish. In regular U.S. trading hours, some blockchain-linked stocks rebounded. Xunlei (Thunder) surged 8.57%, followed by CNMC (China Netcom) with a 4.59% gain and Cheetah Mobile up 3.45%. This volatility highlighted the speculative nature of blockchain equities, which often react more strongly to crypto price movements than fundamentals.
Mining Economics Under Pressure
One of the most alarming developments during this period was that Bitcoin’s market price fell below the average mining cost. Industry insiders revealed that mining operations—dependent on high-powered hardware and substantial electricity consumption—faced increasing unprofitability.
For example, using Bitmain’s popular Antminer S9, the cost breakdown was as follows:
- Hardware: ~18,000 RMB per unit
- Power consumption: ~32.4 kWh per day
- Electricity cost: 0.6 RMB per kWh
Under these conditions, miners needed approximately one year to recoup their initial investment. With Bitcoin trading below production cost, many smaller or less efficient mining operations were forced to shut down or operate at a loss, threatening network decentralization and hash rate stability.
This situation underscored a fundamental truth in crypto economics: when prices fall below mining breakeven levels, short-term pain is inevitable—unless broader adoption or halving-driven scarcity intervenes.
Regulatory Developments in Germany and the U.S.
While market forces dictated price action, regulatory signals added another layer of complexity.
Germany Pushes for Clearer Blockchain Policy
German political parties, during coalition negotiations in early 2018, expressed a shared vision for developing a comprehensive blockchain strategy. According to Reuters, internal financial policy documents indicated support for creating a fair legal framework for cryptocurrency transactions—aligned with European Union standards and international cooperation.
This move suggested growing institutional recognition of blockchain’s potential beyond speculation, focusing instead on regulation that encourages innovation while protecting consumers.
Texas Cracks Down on Unlicensed Crypto Lending
On the other side of the Atlantic, Texas regulators issued another emergency cease-and-desist order, this time targeting DavorCoin, a cryptocurrency-based lending program. The Texas State Securities Board (TSSB) alleged that DavorCoin had been offering unregistered securities, potentially defrauding investors.
This action reinforced a tightening regulatory environment in the U.S., where state-level agencies increasingly scrutinized projects blurring the line between investment contracts and utility tokens.
Platform Updates and Community Shifts
As macro conditions evolved, key blockchain platforms adapted their strategies.
Qtum Disbands WeChat Groups for Telegram
In a move toward global standardization, Qtum (Quantum Chain) announced it would dissolve all official WeChat groups starting February 12, 2018. The team urged community members to migrate to Telegram, citing better scalability and international accessibility.
This shift mirrored a broader trend among blockchain projects aiming to unify global communities under open, real-time communication platforms rather than region-specific apps like WeChat.
NiceHash Lowers Withdrawal Thresholds
Crypto mining marketplace NiceHash improved user experience by reducing withdrawal fees and minimums:
- Withdrawal fee lowered from 0.0005 BTC to 0.0003 BTC
- Minimum withdrawal amount reduced from 0.005 BTC to 0.003 BTC
- Fees for withdrawals over 0.1 BTC cut from 0.5% to a lower undisclosed rate
These changes aimed to enhance liquidity and accessibility for small-scale miners, reflecting efforts to remain competitive amid declining profitability.
Corporate Performance: Xunlei’s Strong Q4 Outlook
Amid market pessimism, Xunlei, a Chinese tech firm heavily invested in blockchain infrastructure, delivered positive news. The company issued financial guidance projecting Q4 2017 revenue between $80 million and $88 million, representing a 103% to 123% year-over-year increase and a 69% quarter-over-quarter growth.
This surge was attributed to strong demand for its shared computing and blockchain-powered content delivery services—proof that even in bear markets, companies building real-world applications can thrive.
👉 Explore platforms enabling next-generation digital asset innovation.
Apple Removes Telegram from App Store
In a controversial development, Apple removed the Telegram app from its U.S. App Store. Users attempting to search for Telegram found no results, though alternatives like Viber and Skype remained available. TechCrunch reported the removal without immediate clarification from Apple.
While Telegram remained accessible via web and third-party sources, the incident sparked debate about app store censorship, digital freedom, and the vulnerability of decentralized communication tools on centralized platforms.
Frequently Asked Questions (FAQ)
Q: Why did Bitcoin fall below $7,500 in early 2018?
A: The drop was driven by a combination of factors including profit-taking after the late-2017 rally, increased regulatory scrutiny globally, declining investor sentiment, and technical selling pressure as key support levels broke.
Q: What does it mean when Bitcoin trades below mining cost?
A: It means miners earn less than it costs to produce new coins, leading to reduced profitability or losses. Prolonged periods below cost can result in miner shutdowns, temporarily lowering network hash rate until prices recover or efficiency improves.
Q: How do government regulations affect cryptocurrency prices?
A: Regulatory announcements—especially from large economies—can significantly impact market confidence. Crackdowns (e.g., trading bans) typically cause sell-offs, while clear, supportive frameworks may boost long-term adoption and stability.
Q: Why are companies like Xunlei gaining despite Bitcoin's fall?
A: Some firms derive value from blockchain infrastructure rather than token speculation. Xunlei’s growth came from demand for its decentralized computing services, showing that utility-based models can decouple from market cycles.
Q: Is Telegram still usable after being removed from the App Store?
A: Yes. Users can download Telegram via its official website or third-party app stores. However, removal from major platforms limits discoverability and onboarding for new users.
Q: Why are blockchain stocks so volatile?
A: Many are small-cap companies with limited revenue directly tied to blockchain. Their valuations often reflect hype rather than fundamentals, making them highly sensitive to crypto price swings and media narratives.
The events of early 2018 serve as a case study in cryptocurrency market dynamics—where price, regulation, technology, and corporate strategy intersect. While volatility remains inherent to this space, periods of correction often lay the groundwork for stronger, more sustainable growth.
👉 Stay ahead of market shifts with real-time data and secure trading solutions.