BTC experienced a price plummet this month, with the virtual asset dipping to its lowest point since September 2017. On Wednesday morning bitcoin climbed to a value of $4,385 (£3,400) by 8pm GMT, according to CoinMarketCap. Since then the asset has found stability, hovering in approximately the same price area from Thursday through to Friday.
At the time of writing, BTC was worth $4,240 (£3,300), in an indication it was beginning to find stability since the price plunge.
But signs of bitcoin’s recovery over recent days may be short-lived, as the asset is typically unpredictable.
Before the crash this month, bitcoin had just come out of a period of remarkable stability for the digital asset, which is known to experience vast swings in value over short periods of time.
At the start of November, the world’s leading cryptocurrency all but flat-lined at roughly £5,000 before rapidly plunging on Wednesday, November 14 in a downwards spiral that continued until the end of the month.
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Speculation abounds in the crypto sphere about the reasons for the price plummet, with some analysts and commentators attributing the downfall to the so-called “hard-fork” of bitcoin cash (BCH) – currently the fourth-largest cryptocurrency by market capitalisation.
A hard fork takes place when groups of miners and developers can’t agree on updates to the software governing a particular digital token.
A given crypto then effectively “splits” into two separate coins and, in the process, a second digital currency is generated.
The November price crash led some crypto experts to question whether there could be an increased cybersecurity threat as owners of bitcoin and other cryptocurrencies become more vulnerable to hacking scams.
Paolo Passeri, global solutions architect at Netskope, maintained the market-wide crypto price crash was the “catalyst” and driving force behind a recent spike in cybercriminal activity.
He told Express.co.uk: “The catalyst driving cybercriminals to find new kinds of attacks is the fall in cryptocurrency prices, as this has made crypto mining a far less viable means of obtaining the currency due to the power costs involved.
“As the price volatility continues, hackers are aiming to capitalise on victims who have profited from the recent price bubble without expending too much resource to achieve their goals.”
Mr Passeri’s comments were echoed by economist Dr Saifedean Ammous who on Sunday night warned of the dangers of cybercriminal attacks.
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He said: “A prolonged drop in difficulty as tech advances means bitcoin becoming cheaper to attack and less secure.”
But the future for cryptocurrencies could be bright, with mainstream financial figures touting their potential.
Mohamed El-Erian, Allianz’s chief economic adviser, said at a Tuesday conference he believed cryptocurrencies were here to stay despite the current slump and the associated backing-away of retail investors.
He said: “I think cryptocurrencies will exist, they will become more and more widespread, but they will be part of an ecosystem.
“They will not be dominant as some of the early adopters believed them to be.”