Over the Black Friday weekend, BTC and rival cryptocurrencies plunged to new lows. The slump brought the market to its lowest point since last September. But towards the end of 2017 BTC surged in value – and some experts are questioning whether the same could happen again.
Cryptocurrency expert Samuel Leach suggested “market fragmentation” was to blame for the price crash, referring to a so-called “hard fork” earlier in November.
However, the founder of Yield Coin gave bullish predictions for the digital asset, saying it was “only a matter of time” before a major upwards breakout.
He told Express.co.uk: “The bitcoin downturn that we’ve seen over the past 48 hours is most likely as a result of market fragmentation, with Bitcoin Cash – the fourth largest currency in terms of market capitalisation – experiencing a hard fork earlier this month.
“While the split didn’t directly impact Bitcoin Cash’s predecessor, it comes as little surprise that secondary fragmentation has impacted the wider cryptocurrency community.”
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He added: “Cyclical price variations are inherent in all cryptocurrencies, and it’s only a matter of time before Bitcoin eventually hits a bull run again.
“While there has been some minor panic in the industry, this has largely been in relation to smaller alt coins for whom the outlook is slightly less certain.
“As prices for major cryptocurrencies, including Bitcoin and Ethereum, continue on a downward trend, more and more buyers are lining up to buy leading tokens at cheaper prices.
“With Bitcoin sitting at $3,000 (£2,342) the potential returns are substantial so there’s no doubt that prices will begin to rise rapidly soon.”
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Prominent trader and technical analyst Peter Brandt also gave what could be interpreted as a bullish prediction.
He said: “BTC is entering the stage of its life cycle when stale and weak money capitulates and strong hands accumulate strategically.”
Bitcoin’s falling “hash rate” has also been partly attributed to the price crash.
The so-called hash rate is essentially the rate at which a bitcoin “miner” solves complex mathematical problems to add a transaction to the underpinning blockchain network.
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Charles Hayter, chief executive of digital currency comparison site CryptoCompare, told CNBC: “Bitcoin has been correlated to its hash rate and with it now falling, so is the price.
“The idea is that the hash rate gives some idea of what underlying opex (operating expenses) and capital costs people are willing to utilise to generate bitcoin and give it a benchmark price.”
Meanwhile, economist Dr Saifedean Ammous tweeted on Sunday night: “Bitcoin’s security depends on a rising price attracting more hash rate, attracting the most advanced tech from processing power makers, making it very expensive to attack.
“A prolonged drop in difficulty as tech advances means bitcoin becoming cheaper to attack and less secure.”