Bitcoin: Cryptocurrecy surges against GBP
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The price of Bitcoin has endured a big slump having reached an all time high just a couple of weeks ago. It saw $15,000 (£10,800) knocked off its value, and fell below $50,000 (£35,000) for the first time since March. It is currently trading at £36,000, and the slump comes after an expert warned this trend could continue. Bobby Lee, founder of cryptocurrency exchange BTCC, told the Independent in February that a “crypto winter” is around the corner as a crash will wipe up to 90 percent from its value.
He said: “Bull market cycles come and go and after a bull market peak, inevitably it could go down by quite a bit, and that’s when the bubble bursts. It can last from two to three years.
“After it peaks out – whether it’s $200,000 (£144,000), $100,000 (£72,000) or even $300,000 (£216,000) – people should be aware that it could fall by 80-90 percent of its value from its all-time peak.”
Giles Coghlan, an expert on cryptocurrencies, told Express.co.uk earlier this year that Bitcoin will not go mainstream.
He also said that investing in cryptocurrencies must be approached with caution.
Mr Coghlan added: “I think the advantage of transferring Bitcoin has gone now we can exchange current currencies so easily with small fees.
“When you see an asset and think, ‘Wow this can only go one way’ – that is a recipe for either making a fortune or losing a fortune.
“What I’d say is yes, you can invest in cryptocurrencies. I would advise all clients against using heavy leverage and manage their risks.
“Know exactly how much of your capital is at stake at any one time and have a clear exit plan.
“In my line of work you see people do disastrous things if you don’t understand how leverage works, which is the use of borrowed money to take on greater risk.”
Some experts, however, think Bitcoin will be a roaring success.
David Sacco, an expert in cryptocurrencies from the University of New Haven, told Express.co.uk earlier this year that Bitcoin will one day reach the $1million (£722,000) mark.
He said: “Companies tend to do what other companies do, especially if something is seen to be effective.
“Other companies will follow suit because they’ve seen the results.
“There’s the scarcity associated with it, I think we are at the tip of the iceberg of people’s acceptance of it.
“We have a globalised economy in which people have less trust in global institutions, making Bitcoin an appealing prospect.
“I wouldn’t bet against Bitcoin hitting a million dollars in my lifetime, even in the next five to 10 years.”
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Britain’s Financial Conduct Authority (FCA) warned investors of the risks that come with Bitcoin following the recent slump.
They said: “If consumers invest, they should be prepared to lose all their money.
“Some investments advertising high returns from crypto assets may not be subject to regulation beyond anti-money laundering.
“Significant price volatility, combined with the difficulties valuing [Bitcoin] reliably, place consumers at a high risk of losses.”
Express.co.uk does not give financial advice. The journalists who worked on this article do not own Bitcoin.
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