The price of bitcoin plunged to a 13 month-low, leaving many punters who jumped onto the crytocurrency bandwagon last winter sitting on substantial a paper loss.
Billions of dollars have been wiped from the value of the original and best known cryptocurrency in the past week alone, having tumbled by over 30 per cent to $4,450.
The coin hasn’t traded under $5,000 since early October last year when it reached the milestone amid its meteoric run-up to an all-time of $19,343 just before Christmas.
Until last Wednesday, bitcoin had managed to maintain a two month period of relative stability relatively trading between the $6,000 and $7,000
Many may have invested in the coin in hope of make some serious money before it was too late, but those who bought at that peak are now sitting on a 77 per cent loss – and that’s before investment fees are taken into account.
To put this into context, it means a £10,000 investment in bitcoin on 17 December 2017 would now be worth just £2,300.
RELATED ARTICLES Share this article Share 44 shares HOW THIS IS MONEY CAN HELP It is not just bitcoin that has seen prices nosedive.
Other cryptocurrencies like ethereum, bitcoin cash and litecoin have tumbled by 53 per cent, 54 per cent and 33 per cent to $134, $244 and $33 respectively.
The jury is out over the cause of the latest tumble in crytocurrency market, but much of the speculation has focused on bitcoin cash – an offshoot of bitcoin – splitting into two separate currencies that are now effectively in competition with each other on 15 November.
Bitcoin cash is now known as bitcoin ABC and the new ‘fork’ is called bitcoin SV.
Another reason being touted is the recent enforcement by the U.S.
Securities and Exchange Commission – America’s financial watchdog – against startup cryptocurrency companies Paragon and AirFox for unregistered sales of securities.
Both have been ordered to repay millions of dollars in initial coin offering revenues to investors, as well as pay a civil money penalty of $250,000 (£195,000).
Highs and lows: Bitcoin has fallen to a 13 month low – down from a peak of $19,343 in mid-December last year
Until last Wednesday, bitcoin had managed to maintain a two month period of relative stability relatively trading between the $6,000 and $7,000. But the recent fall will be grist to the mill for those who think that bitcoin and other cryptocurrencies can’t be classed as credible investments.
Ben Yearsley of Shore Financial planning said: ‘Quite simply it isn’t an investment proposition. It never has been. It’s pure speculation.
‘I’m not a fan of cryptocurrencies as they are for short term speculating and trading and not for proper investors.’
Mati Greenspan, analyst at online broker eToro, disagrees.
He said: ‘In the same way previous cycles have not signalled the end for broader markets, these price movements don’t signal the end for cryptoassets.
‘We’re still very much at the beginning of the crypto journey. At this stage, volatility is to be expected.’
He added: arrowheadinnovationfund ‘What we’re seeing now are the after-effects of the unprecedented rise of bitcoin and other cryptoassets seen in 2017.
This year is simply a retracement of that.
‘The same is happening in broader markets as well where tech stocks, for example, are following a similar pattern.
‘As with all markets, if prices reach levels that are higher than can be justified they need to pull back.
These cycles can sometimes be accentuated in the crypto market due to the riskier nature of this nascent industry.’
<div class="art-ins mol-factbox money" data-version="2" id="mol-dd996fe0-ecbb-11e8-827f-130f24c13d79" website price nosedives to a 13 month low of $4,450