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Bitcoin has experienced huge price drops in recent days, with the cryptocurrency tumbling by more than $2,000 (£1,600) to take its value below $8,000 for the first time since June.
It has since recovered slightly but many investors remain cautious about bitcoin’s short-term prospects. Others, however, remain convinced that the cryptocurrency will continue to see considerable gains before the end of the year.
Bitcoin was trading at around $4,000 at the start of 2019, having suffered prolonged losses since it reached a record high of close to $20,000 at the end of 2017.
Steady gains throughout 2019 saw bitcoin triple in price by August, before its latest crash took it back down again.
“The volatility of cryptocurrencies is what makes them excellent conduits of growth for traders, investors and growing businesses,” Daniele Mensi, CEO of digital exchange group Nexthash, told The Independent.
“What is important to remember is that bitcoin is still up around 115 per cent this year, so its short term peaks and troughs are necessary to facilitate longer-term growth across the currency.”
1/8 Satoshi Nakamoto creates the first bitcoin block in 2009
On 3 January, 2009, the genesis block of bitcoin appeared. It came less than a year after the pseudonymous creator Satoshi Nakamoto detailed the cryptocurrency in a paper titled ‘Bitcoin: A peer-to-Peer Electronic Cash System’
Reuters
2/8 Bitcoin is used as a currency for the first time
On 22 May, 2010, the first ever real-world bitcoin transaction took place. Lazlo Hanyecz bought two pizzas for 10,000 bitcoins – the equivalent of $90 million at today’s prices
Lazlo Hanyecz
3/8 Silk Road opens for business
Bitcoin soon gained notoriety for its use on the dark web. The Silk Road marketplace, established in 2011, was the first of hundreds of sites to offer illegal drugs and services in exchange for bitcoin
4/8 The first bitcoin ATM appears
On 29 October, 2013, the first ever bitcoin ATM was installed in a coffee shop in Vancouver, Canada. The machine allowed people to exchange bitcoins for cash
REUTERS/Dimitris Michalakis
5/8 The fall of MtGox
The world’s biggest bitcoin exchange, MtGox, filed for bankruptcy in February 2014 after losing almost 750,000 of its customers bitcoins. At the time, this was around 7 per cent of all bitcoins and the market inevitably crashed
Getty Images
6/8 Would the real Satoshi Nakamoto please stand up
In 2015, Australian police raided the home of Craig Wright after the entrepreneur claimed he was Satoshi Nakamoto. He later rescinded the claim
Getty Images
7/8 Bitcoin’s big split
On 1 August, 2017, an unresolvable dispute within the bitcoin community saw the network split. The fork of bitcoin’s underlying blockchain technology spawned a new cryptocurrency: Bitcoin cash
REUTERS
8/8 Bitcoin’s price sky rockets
Towards the end of 2017, the price of bitcoin surged to almost $20,000. This represented a 1,300 per cent increase from its price at the start of the year
Reuters
1/8 Satoshi Nakamoto creates the first bitcoin block in 2009
On 3 January, 2009, the genesis block of bitcoin appeared. It came less than a year after the pseudonymous creator Satoshi Nakamoto detailed the cryptocurrency in a paper titled ‘Bitcoin: A peer-to-Peer Electronic Cash System’
Reuters
2/8 Bitcoin is used as a currency for the first time
On 22 May, 2010, the first ever real-world bitcoin transaction took place. Lazlo Hanyecz bought two pizzas for 10,000 bitcoins – the equivalent of $90 million at today’s prices
Lazlo Hanyecz
3/8 Silk Road opens for business
Bitcoin soon gained notoriety for its use on the dark web. The Silk Road marketplace, established in 2011, was the first of hundreds of sites to offer illegal drugs and services in exchange for bitcoin
4/8 The first bitcoin ATM appears
On 29 October, 2013, the first ever bitcoin ATM was installed in a coffee shop in Vancouver, Canada. The machine allowed people to exchange bitcoins for cash
REUTERS/Dimitris Michalakis
5/8 The fall of MtGox
The world’s biggest bitcoin exchange, MtGox, filed for bankruptcy in February 2014 after losing almost 750,000 of its customers bitcoins. At the time, this was around 7 per cent of all bitcoins and the market inevitably crashed
Getty Images
6/8 Would the real Satoshi Nakamoto please stand up
In 2015, Australian police raided the home of Craig Wright after the entrepreneur claimed he was Satoshi Nakamoto. He later rescinded the claim
Getty Images
7/8 Bitcoin’s big split
On 1 August, 2017, an unresolvable dispute within the bitcoin community saw the network split. The fork of bitcoin’s underlying blockchain technology spawned a new cryptocurrency: Bitcoin cash
REUTERS
8/8 Bitcoin’s price sky rockets
Towards the end of 2017, the price of bitcoin surged to almost $20,000. This represented a 1,300 per cent increase from its price at the start of the year
Reuters
Noted commodity trader Peter Brandt predicted bitcoin will continue to fall until it reaches $5,500, but will then continue its upward trajectory.
In the long term, he forecasted bitcoin to be worth $50,000 – a figure seen as conservative by some cryptocurrency advocates.
Cyber security pioneer John McAfee, who has become a prominent figure in the cryptocurrency space, stood by a prediction he made in 2017 that bitcoin will see exponential price growth in 2019 and 2020.
“Ignore this drop in bitcoin’s price. I am firmly with Peter Brandt in his medium term $50k price prediction,” Mr McAfee tweeted.
“I am also firm on my $1m price by the end of 2020. Stop wringing your hands!”
It is difficult to pinpoint the exact reason for bitcoin’s most recent demise, though some have said negative market sentiment can be attributed to the launch of the bitcoin futures platform Bakkt.
Pessimism surrounding Bakkt resulted in a mass sell-off, which at one point saw more than $1,000 wiped from bitcoin’s value in the space of 30 minutes.
Bitcoin’s notorious volatility could see traders once again plough money into the cryptocurrency in the hope of turning a quick profit, according to market analyst Simon Peters, who works for online trading platform eToro.
“Now that bitcoin is now trading below $8,500, it could become an attractive proposition for investors who want to buy the dip,” he said.
“We could see the price rise back up to $10,000 within the space of the next month.”
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