Bitcoin Price Limps Through February as Cryptocurrency Market Follows

As February draws to a close, most investors would rather forget the month. Bitcoin’s price at the end of February was a familiar story.

BTC briefly crossed the $11,000 mark for the second time in as many weeks but quickly pared its gains. At 06:30 UTC this morning, bitcoin was changing hands at $11,044, but it was down to $10,460.11 per pop by 13:40 UTC. That means the original coin ends February pretty much on a sideways note, having eked out gains of 3% during the course of the month as of this writing. 

Still, that’s better performance than other cryptocurrencies among the top 10 most valuable coins, all of which registered price losses this month. Stellar and EOS were the worst performers in that group, having sliced 40% and 34% off their respective prices. Although their net gains since the start of this year are positive, Ethereum and NEO had a poor February and lost 24% and 7% of their values. 

The overall market capitalization for cryptocurrencies was $447.9 billion, as of this writing. The February slump in cryptocurrency markets resulted in a 13.6% decline in overall market cap this month, as of this writing, from $519.9 billion at the start of the month to the current figure.

More Cryptos At Cboe? 

Cboe recently finished a software upgrade to its platform, and a Bloomberg report hypothesizes that the futures exchange may be lining up other cryptocurrencies for futures markets. But before it does that, the exchange might want to consider its experience with bitcoin futures.

Trading volumes in bitcoin contracts have remained thin and the number of contracts being traded has increased fairly slowly. Another regulatory agency, CFTC, has issued a ruling to employees, allowing them to invest in bitcoin futures at exchanges that are not regulated by the CFTC. This means that CFTC employees will not be allowed to trade contracts at CBOE and CME.

Angela Walch, associate professor at St. Mary’s University School of Law, told Bloomberg the CFTC’s decision was “mind-boggling” and that it could absolutely skew their regulatory decisions concerning bitcoin futures.  (See also: Four Problems With Bitcoin Futures.) 

SegWit Adoption  

Coinbase’s decision to roll out SegWit updates to its network seems to be making its presence felt in bitcoin’s blockchain. (See also: Coinbase To Integrate SegWit: What It Means For You). 

SegWit transactions account for more than 30% of all transactions on bitcoin’s network. This might be cause for celebration since it would validate SegWit’s utility in helping unclog the transaction backlog and making the virtual currency an efficient medium for transactions.

But some argue that the spike might be a result of Coinbase batching its transactions (i.e., collecting multiple non SegWit address transactions from the past and processing them in a single batch to make them SegWit compliant) rather than new SegWit-compliant transactions on its network.

The number of pending transactions and transaction fees on bitcoin's network has registered a sharp decline in the last three months. Efficient processing of transactions will help draw in more investors to bitcoin and have a positive effect on its price.  

Investing in cryptocurrencies and other Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns small amounts of bitcoin.