Cryptocurrency enthusiasts embody an inherently optimistic ethos that's demonstrated in some of their most popular expressions like "HODL" (hold, misspelled) and "moon" (as in, when will crypto prices stop rising to the moon?), two sentiments that encapsulate the erratic nature of crypto markets.

This year, those notions are being tested more than ever as cryptocurrencies have been on a continual decline since the start of the year with few hopeful indicators for investors to hang their hats on. Even for a market accustomed to turbulence, losses of 80% or more are particularly startling.

It's been six months since crypto markets showed any semblance of growth, and almost a year since they reached their peak. Instead, there is a combination of a market correction, shifting sentiment and external factors pushing the prices of cryptocurrencies down.

While this reality has impacted nearly every digital currency -- almost all of the top 100 tokens by market caplisted on crypto analytics site CoinMarketCap are in the red for the year -- the impact is especially prescient for Bitcoin, the first and still most popular digital currency.

Bitcoin's Bear Run

When Bitcoin's value approached $20,000 at the beginning of the year, many, like perennial crypto-bull Mike Novogratz, predicted its value would continue to increase. Although Mr. Novogratz now predicts that Bitcoin will not top $9,000 this year, he once expected the digital currency to exceed $40,000 by the end of 2018.

After settling in around $6,500 throughout the spring, Bitcoin has again dropped, closing below $4,000 for the first time in more than a year and currently stands at around $3,400.

In addition, a deluge of Bitcoin-related products was expected to raise the currency's status, lifting it further into the mainstream and increasing its value. Most notably, the long-anticipated Bitcoin ETF never materialized, and it's still unclear when regulatory approval for it will come through.

Meanwhile, some financial institutions are reconsidering their plans for a crypto-related product, a sign that the unbridled enthusiasm for Bitcoin is a thing of the past.

Causes of the Downturn

Although it's tempting to oversimplify the market's stunning retreat, Bitcoin and other cryptocurrencies face a torrent of headwinds that are pressuring its price.

First, a general market downturn is impacting most investment vehicles. For instance, after a nearly ten-year bull run, the stock market has been behaving equally as erratically, and sudden drops in November and December eliminated its gains for all of 2018. In this way, cryptocurrencies aren't entirely an outlier.

Of course, cryptocurrencies are enduring several trials unique to their sector. Increasing regulation has been a theme throughout 2018, and the embarrassing news that two celebrities, Floyd Mayweather Jr. and Khaled Khaled, were forced to repay earnings from their participation in ICOs certainly doesn't engender investor enthusiasm. When coupled with the SEC's ruling that forced two ICOs to return money to their investors, it's clear that regulation is playing a negative role on investor sentiment in the crypto space.

At the same time, the deluge of hacks on unregulated crypto exchanges further damages the opportunity for robust growth.

Is This the End for Bitcoin?

To be sure, Bitcoin has been through this before. Throughout its ten-year existence, Bitcoin has endured a series of bull and bear runs that ultimately led to its price jump in 2017.

In other words, rumors of its death may be greatly exaggerated. After all, digital currencies attained significant mindshare along with their market share, and shifting sentiments toward digital commerce means that there is likely a place for Bitcoin and other digital currencies going forward.

Ultimately, it's been a terrible year for Bitcoin, but whether this is a new normal or another chapter in a growth story is still to be determined.

The author holds stock in investment holding company, Leucadia, and is a partner in an emerging technology marketing firm, Notability Partners. He holds no positions in cryptocurrencies nor in any companies that invest in them.