Why has the cryptocurrency’s price dropped?
While it isn’t clear why bitcoin’s price has dropped so quickly, it isn’t hugely surprising.
Bitcoin is widely considered to be a bubble, which could keep inflating until it completely collapses.
The sudden slump does, however, come amid a great deal of negative press.
This week, the US Securities and Exchange Commission reportedly suspended trading in The Crypto Company, a US based cryptocurrency consultancy, amid concerns over stock manipulation.
South Korean bitcoin exchange Youbit also announced its closure, after hackers stole 17 per cent of all assets.
The value of the notoriously volatile cryptocurrency has fluctuated unpredictably all year, with nobody truly knowing whether it is on the verge of rising even further or falling spectacularly.
Just 1,000 bitcoin holders are believed to own 40 per cent of the entire market, and it has been claimed that they can cause its value to plummet or soar at any point.
What do experts say?
All throughout bitcoin’s spectacular recent rise, fears around it being a huge bubble that could burst at any moment have only grown.
It has been labelled a “huge scam”, a “dangerous speculative bubble” and compared to an infamous historical crash involving tulip bulbs.
JPMorgan chief executive Jamie Dimon recently described bitcoin investors as “stupid” and said he would fire any staff caught trading in it.
However, its rapid rise has, understandably, also made it irresistible to many.
Some have even speculated that it could creep towards the $1m mark. However, the overwhelming consensus is that its price will eventually crash.
What alternative digital currencies are there?
The rise in interest around bitcoin appears to have helped drive up the value of other digital currencies, such as ethereum and litecoin.
Though they’re yet to hit the heights of bitcoin, both have seen spectacular gains over recent weeks.
Litecoin is up more than 8,990 per cent over last year and more than 360 per cent over last month, and ethereum is up more than 10,520 per cent over last year and more than 125 per cent over last month, according to the Coinbase exchange.
A large number of people are thought to be investing in these lesser-known digital currencies in the hope that they will go on to surge like bitcoin.
Tax time ;) people simply taking gains off the table from a stellar year. All markets go up and down - this is simply consolidating price. It's ebb and flow of markets, nothing more. It can't go straight up forever, so it rests - then runs.
💸 Happy Trading! 💸
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