Bitcoin price: is the cryptocurrency bull run over?

Forecasters clash as digital coin’s value drops again

Bitcoin
(Image credit: Dan Kitwood/Getty Images)

Bitcoin investors are bracing for another rocky ride as the volatile cryptocurrency takes a dip following weeks of gradual gains.

The digital coin reached its highest value in 15 months last week after breaking through the $10,000 mark (£7,970) - a psychological barrier that once surpassed, spurred investors on to grow their stash of digital coins.

But after peaking at $13,780 (£10,980) on 26 June, bitcoin plunged by around $3,000 within the space of 24 hours, before tumbling further to $9,810 (£7,820) on 2 July, according to ranking site CoinMarketCap.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Although values had climbed back to $11,230 (£8,950) as of midday today, prices are still well below their recent highs.

Is the bull run over?

Bitcoin certainly seems to have lost the momentum that sent values slowly climbing in recent weeks, but it’s not yet known whether the recent price fluctuations are a sign of imminent declines or just the latest swing in the virtual coin’s ever-changing fortunes.

According to cryptocurrency news site FXStreet, the near-future outlook for bitcoin values is “mostly bearish”, suggesting that more declines may be on the horizon.

But Forbes argues that bitcoin’s recent swings are merely signs of the digital coin’s “loony-tunes volatility”, and predicts that prices could surpass $20,000 (£15,940) before the year is out.

That said, the news site admits that its predictions are “just a crude sketch” based on similarities between bitcoin’s price fluctuations in 2017, when prices came within touching distance of the $20,000 mark, and the virtual coin’s patterns in 2019.

Some experts argue that the volatility could ignite interest among investors, who may use the period of uncertainty to build their stash of bitcoin.

Arthur Hayes, head of cryptocurrency exchange BitMEX, told attendees at the Asia Blockchain Summit in Taiwanese capital Taipei this week that “bitcoin is fun, but it’s a hell of a lot more fun at 100 times leverage”, Bloomberg reports.

“That’s what people want to see in crypto, they want that high volatility,” he said. “At the end of the day, we’re all in the entertainment business of traders.”

That view is shared by Charlie Lee, creator of bitcoin rival litecoin, who says that the cryptocurrency market’s current volatility will “definitely bring more people into the space”.

Have bitcoin’s rivals faced similar declines?

Yes. In the cryptocurrency world, rival coins often lose momentum when bitcoin values start sliding.

Ethereum, the market’s second largest cryptocurrency behind bitcoin, has slipped from a high of $353 (£280) last Wednesday to around $293 (£230) today, according to CoinMarketCap.

Banking-focused coin Ripple has suffered similar declines. The digital currency, which sits in third place, has plunged from $0.49 (£0.39) on Wednesday to $0.39 (£0.31), figures on the ranking site show.

Continue reading for free

We hope you're enjoying The Week's refreshingly open-minded journalism.

Subscribed to The Week? Register your account with the same email as your subscription.