Bitcoin’s recent woes has led some to question the future of cryptocurrencies. The bitcoin price has plummeted 80 percent in 2018, with this month’s fire sale sparked by rival cryptocurrency, bitcoin cash, splitting in two due to developers and miners disagreeing over its future. But bitcoin has mounted a comeback of sorts recently, surpassing the psychological $4,000 (£3,129) mark after falling as low as $3,600 (£2,816) last week, according to CoinDesk.com.
Samantha Robb of Wirex, a provider of cryptocurrency wallets linked to Visa debit cards, believes market tensions are responsible for the rout that wiped billions from the world’s biggest cryptocurrencies.
The fact that Bitcoin has no intrinsic value makes it extremely vulnerable to investor sentiment
She said: “Due to the fact that Bitcoin has no intrinsic value it is extremely vulnerable to investor sentiment.
“You have three main camps – those that got into the market when Bitcoin was trading near $20k and those who wish they had bought at $1k.
“The camp that are in severely negative territory are hoping to win back some losses – perhaps by dollar cost averaging.
“Those who experienced FOMO are tentatively testing the waters hoping to catch another $20K wave.
Bitcoin price news: BTC has experienced a wretched two weeks
Bitcoin price news: Crypto’s woes has led some to question the future of cryptocurrencies
“The third camp are the traders who are taking advantage of volatility and trading minute by minute.
“All of these actions create a perfect storm of turmoil – there is absolutely no way to predict what will happen in the coming days let alone weeks or months.
“Until the markets are fully regulated and everyone is singing from the same hymn sheet in terms of their place within established markets, we will continue to see this kind of volatility.
“Wirex plays a huge role in bringing cryptocurrencies into the mainstream by providing a secure and instant payment platform for users.
“However, this is a big beast to tame and it’s going to take regulators, traditional players and innovators to work in unison to bring stability to the crypto market”, she said.
Bitcoin trading has proven to be a volatile market over the past 12 months.
Stephen Innes, the Asia-Pacific Head of Trading at Oanda believes bitcoin could fall as low as $2,500 (£1,957), claiming the behaviour of the asset over the past few months has not demonstrated to investors that a bottom has been reached.
Despite the pronouncements of “soothsayers”, Mr Innes stated the current situation remains a decidedly negative one for investors, who will consequently continue to avoid buying bitcoin.
The key factor behind this according to him is the atmosphere of uncertainty about where the market is headed as bitcoin continues to its protracted bear run.
He said: “What I’m really looking at here is the way coins have been trading over the last few months.
Bitcoin price news: Are market tensions responsible for the rout?
Bitcoin price news: BTC has mounted a comeback of sorts recently
It is indicated that the bottom is not in so therefore I do not think any mature investor is willing to catch this falling knife.
“And that tells me there is more room to go and as soon as we hit some of these key round figure inflection points like $3,500 and $2,500 (£2,738 and £1,956), the psychological impact will weigh on more inexperienced traders.”
As cryptocurrencies fell across the board, bitcoin’s share of the total cryptocurrency capitalisation rose, from lows of 51 percent in early November to 53 percent today.
This domination is believed to highlight bitcoin’s enduring appeal to investors and cryptocurrency miners alike.
READ MORE: Will bitcoin hit $15,000 by Christmas?
Jeff Sprecher, chairman of the New York Stock Exchange, believes bitcoin and other cryptocurrencies are here to stay.
Mr Sprecher said: ”Somehow bitcoin has lived in a swamp and survived.
“There are thousands of other tokens that you could argue are better but yet bitcoin continues to survive, thrive and attract attention.
“Often times in finance, it’s not about being the best — it turns out to be about being the broadest and the most commonly accepted and for whatever reason bitcoin has become that.”