The price of bitcoin is hovering around its lowest point since November last year – and it might not come back up, experts warn.
Bitcoin is currently trading at below $7,000 on major cryptocurrency exchanges, having fallen from around $11,500 in early March. At its peak in December 2017, one bitcoin was worth close to $20,000.
The dramatic price rises were driven by a significant surge in interest in the cryptocurrency late last year. Analysis from Barclays bank recently labelled that fast surge an “infection" – which behaved like a disease, and has now been treated.
“We developed a theoretical model of an asset price with a pool of speculative investors and compared it with actual bitcoin price behaviour to see what it might imply for the future dynamics," Barclays economists said on Tuesday.
"The model has clear parallels with compartmental models of the spread of an infectious disease in epidemiology."
Bitcoin’s recent price falls have been reflected across other cryptocurrency markets, with ethereum, ripple, bitcoin cash and litecoin all experiencing significant losses in recent months.
This downward momentum has led some analysts to speculate that more price falls for bitcoin can be expected, although they are cautious to state it will fall below $6,000 in the short term.
The recent losses represent bitcoin’s worst ever start to a year, however more hopeful analysts believe bitcoin’s demise will be only temporary.
Last week, bitcoin expert and former COO of Skype Michael Jackson told The Independent that bitcoin’s recent price falls “will appear trivial” in the long run.
“The price has been driven by speculators and they suddenly got cold feet but there’s considerable effort going on behind the scenes, including new underlying technology that is powering faster transactions,” Jackson said.
“Meanwhile, regulators seem open-minded and are now working to eliminate the risks for consumers. So I see no reason why bitcoin shouldn’t fulfil its dream.”
Analysis of the current market by leading cryptocurrency publication CoinDesk suggested bull investors - those betting the market will improve - and bear investors - those betting the price of bitcoin will decline - had reached a stalemate in recent days.
The short-term direction the price of bitcoin goes from the current impasse could significantly impact bitcoin’s price prospects in the long term.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies