Leading cryptocurrency Bitcoin plunged to its lowest price since October 2017 on Monday to $5,098.88, according to Coindesk at 14.25pm (GMT). Bitcoin reached a 24-hour high of $5,638.98 before it rapidly tumbled after opening 24-hours ago at $5,526.00. According to Coindesk, the year-on-year price fall stands at 32 percent, with prices trading about $7,5000 this time last year.
Speaking on Thursday, Wayne Trench, CEO of OSL Brokerage, explained the recent drop in price.
He told CNBC: “If you actually turn the clock back 12 months, Bitcoin is actually at almost the same level it was at this time last year.
“Obviously, it enjoyed a meteoric rise in December and January earlier this year but has since peddled back a lot of those retail speculation has driven gains. Interestingly, over the last couple of months, we’ve had record low levels of volatility for bitcoin.
“It’s really hovered around the $6,200 to $6,500 range and has seen fairly strong support at $6,200. Over the last 36 hours or so, a fairly unique market event with one of the bitcoin cash, or bitcoin cash blockchain, forking.
“Any fork event creates disruption in the marketplace. That’s really been the driver for the price action over the last 24 to 36 hours.”
Mr Trench explained “forking” in the cryptocurrency and said: “This has happened before. The original bitcoin protocol which was established around ten years or so ago was forked a little while ago and a new blockchain, bitcoin cash, was created. At that point in time we saw similar dislocations in the market.
“Investors were keen to try and profit from that trade event and we are seeing something similar play out now.”
Ethereum, Litecoin and XRP were all down on Monday in a 24-hour basis according to Coindesk.
eToro analyst Mati Greenspan wrote: “The next logical level of support is at $5,000 but if that doesn’t hold, the next logical support level isn’t until $3,500.”
Although the price of Bitcoin has fallen in recent days, overall BTC’s price has increased dramatically since its creation a decade ago.
Dr Ammous argued bitcoin’s low supply growth would soon make it the “hardest money on earth” as existing fiat currencies become less desirable.
He said: “That is why in ten years it has appreciated by about 700million percent.”
Since early September, bitcoin had traded in a narrow range between $6,000 (£4,695) and $7,000 (£5,477), following months of steady losses that had seen it fall from a high close to $20,000 (£15,650) in late 2017.
The cryptocurrency saw its highest value before Christmas when it reached the monumental price of just under $20,000.
Bitcoin Market Price Chart in RealTime