Bitcoin kicks off second half of the year with a 12 percent rally

Key Points
  • Bitcoin bounced back 12 percent from its lows last week, hitting a high of $6,609.50 Monday.
  • The entire cryptocurrency market has struggled to find its footing in 2018, with a 57 percent drop in total value this year.
  • It remains to be seen whether bitcoin will live up to some of the bullish calls for it made earlier this year, including Fundstrat Global Research's Tom Lee's $25,000 year-end target.

After a sluggish start to the year, bitcoin started the month of July with a 12 percent rebound off last week’s lows.

The cryptocurrency rose 4 percent Monday to a high of $6,661.76 as of 2:30 p.m. ET, according to data from CoinDesk.

Last week, bitcoin skidded to its lowest level since November, under $6,000, which traders attributed to CME futures contracts expiring and overall lackluster interest from new buyers. The world’s largest and first cryptocurrency has struggled from that lack of enthusiasm, and prices have dropped 52 percent since January, according to CoinDesk.

Still, bitcoin is up 145 percent since last July and saw roller coaster trading for the remainder of last year. The digital currency rose more than 1,300 percent to almost $20,000 in 2017, pushed higher by a wave of retail investors.

The fanatical interest has also waned for other cryptocurrencies. Ethereum is down 40 percent this year, while XRP has dropped about 80 percent. Litecoin has fallen 64 percent, while bitcoin cash is down 70 percent in the same time frame.

The entire cryptocurrency market has shed 57 percent of its value after starting January with a $608 billion market capitalization, according to

After bitcoin’s epic rise, thousands of other cryptocurrencies known as "alt-coins" popped up in a fundraising method known initial coin offerings, or ICO. In that process, a company issues a new, often cheap coin for investors to buy in return for use in the company’s product. In many cases these coins were scams, a joke, or based on an unfinished product.

At least 800 of those projects are now dead, according to website Dead Coins, which tracks cryptocurrencies that raised money through an ICO.

The man who called the bitcoin drop now sees...
The man who called the bitcoin drop now sees...

Part of the death sentence could be a result of regulatory crackdowns from the Securities and Exchange Commission. The financial watchdog has of pump-and-dump schemes in ICOs, some down and one backed by Floyd Mayweather and DJ Khalid with fraud.

Bitcoin pundits have argued that more regulatory clarity could open up the gates to institutional investors.

“We’ve seen the same concerns, including lack of regulatory clarity still holding for the balance of 2018 and keeping many institutions at bay,” said Joe DiPasquale, CEO of BitBull Capital. "We don't think that demand will happen until 2019 — it’s still a market for those who are earlier movers in crypto."

The SEC is taking steps in that direction with a recent specifying that ethereum is not a security. The agency did say, however, it would not change the rulebook when it comes to classifying cryptocurrencies.

It remains to be seen whether bitcoin will live up to some of the bullish calls for it made earlier this year.

Fundstrat Global Research's Tom Lee, the only major Wall Street strategist to issue bitcoin price targets, predicted the cryptocurrency would reach $20,000 by the middle of the year and $25,000 by the end of 2018.

Venture Capitalist Tim Draper predicted bitcoin would be $250,000 by 2022. When asked during an April bitcoin debate how the digital currency compared to his early investments in Tesla, Hotmail and Skype, Draper said bitcoin will be "bigger than all of those combined" and "bigger than the internet."

Pantera Capital founder and CEO Dan Morehead said in an April investor letter that bitcoin is "highly likely to have exceeded $20,000 within a year."

WATCH: Mohamed El-Erian on bitcoin

Bitcoin will remain but not as a currency, predicts Mohamed El-Erian
Bitcoin will remain but not as a currency, predicts Mohamed El-Erian