Bitcoin crashes below $5,000: will prices continue to sink?
Experts say ‘crypto bloodbath’ could see values tumbling much further
Cryptocurrency markets are in turmoil after bitcoin’s value dipped below $5,000 (£3,885) yesterday evening - its lowest point since October 2017.
Prices for the digital coin have fallen further this morning, to around $4,500 (£3,500), according to ranking website CoinMarketCap. That figure is almost $1,000 (£780) less than the virtual currency’s value on Monday morning.
The drop is being blamed in part on a “hard fork” - a change whereby the cryptocurrency splits in two to form a new digital coin - in the token’s sister virtual currency bitcoin cash last week.
This created two new cryptocurrencies, bitcoin ABC and bitcoin SV, triggering mass sell-offs among investors as they move over to the new digital coins.
However, The Guardian suggests that a series of warnings from major investment firms and bankers over the volatility of cryptocurrencies may also be prompting investors to turn their back on bitcoin and its rivals.
Either way, the “crash” brings an end to “one of the most prolonged periods of stability” in bitcoin’s history, notes The Independent. The currency had been trading at between around $6,000 (£4,660) and $7,000 (£5,440) since early September.
Some investors had predicted that this stability was the “calm before the storm”, but “many anticipated the price shift to go in the other direction”, the news site adds.
Will the markets continue to decline?
No one can say for certain where bitcoin’s value is heading over the coming months, but the massive drop from its December high of almost $20,000 (£15,500) doesn’t bode well.
Neil Wilson, chief marketing analyst at trading platform markets.com, calls bitcoin’s plummeting value a “crypto bloodbath” and warns that “things looks like they only get worse from here”.
“Where is the incentive to buy? It does rather look like the bottom is coming out of this market,” Wilson told The Guardian.
Meanwhile, Mati Greenspan, a senior marketing analyst at cryptocurrency trading site eToro, told the Daily Express that bitcoin dipping below its $5,000 “level of support” indicates that prices could fall to as low as $3,500 (£2,720).
But some experts say the outlook for bitcoin may still be bright, at least in the long term.
The head of British-based consultancy firm deVere Group, Nigel Green, told The Independent last month that continuing “adoption” of bitcoin could see values skyrocket by “at least 5,000% above its current valuation over the next decade”.