Yahoo Finance Bitcoin price drops below $4,000 after wave of record highs - but what next?
Bitcoin slumped back to below $4,000 after a wave of record highs since its split into two separate cryptocurrencies.
The price of the virtual currency had soared to a record new high of $4,500 on Thursday, but is now trading at $3,977 - a seven-day low.
Bitcoin prices have been rising steadily over the past two weeks following an event known as a hard fork, which resulted in two competing strands of the cryptocurrency emerging.
The virtual currency’s online community became divided over the best way to process bitcoin transactions following a surge in popularity this year, leading to the split.
Analysts remain divided over the future of the volatile digital currency, with some predicting it is just the latest tech bubble that will soon be ready to burst.
Its price has been known to fluctuate wildly, plummeting in October 2013 after online black market the Silk Road was shut down by the FBI. It dropped sharply again in August 2016 after hackers stole bitcoin worth £29 million from digital currency exchange Bitfinex.
However, other analysts believe the price of bitcoin will stabilize around the $4,000 for the next few months, according to coindesk.
Back in March, the value of bitcoin surpassed gold for the first time, described by one expert as a “defining moment in monetary history”.
The bitcoin price surge over the past 12 months has been attributed to a strong demand in China following the country placing restrictions on gold imports.
There is also speculation that the first bitcoin exchange-traded fund is set to receive US regulatory approval.
So will the bubble burst?The Telegraph’s Technology Editor, James Titcomb, believes investors should avoid bitcoin.
“It’s hard to look at bitcoin’s price now without wishing one had invested years ago - £2,000 invested five years ago would make you a millionaire by now,” he says.
“But there are now clear warning signs - its price fell by $400 in one day [in May], for no discernible reason. While the party may continue for a while, it’s just as likely to end spectacularly.”
Meanwhile, the price of rival cryptocurrency ethereum has risen to a two-month high.
