Find your prefect broker in under 1 minute with our interactive broker finder here
Spread betting brokers are predicting an uncertain time ahead for crypto-currency Bitcoin after its spectacular rise came to an equally spectacular end over the last two weeks. Bitcoin passed its all-time high of $19,850 on December 17, before plunging to lows of $12,500 by December 22, as fears over its security, long-term prospects and the threat of attractive rivals made severe dents in its value. Unfavourable coverage in the media has also harmed Bitcoin’s reputation, slowing down what had been an unstoppable ascent.
Financial spread betting organisation City Index sees unsettled times ahead for Bitcoin, as investors enter a period of price-discovery while the market attempts to decide just how much the crypto-currency is really worth. Their analysis is that other similar currencies such as Litecoin and Ripple have been eating away at Bitcoin’s market share, thanks to their relative affordability after its rapid rise, as investors choose to back rivals or withhold investment altogether after widespread fears of a ‘Bitcoin bubble’ shook confidence. High-profile attacks on so-called Bitcoin mining servers have also made potential investors wary of the currency’s security, due to its lack of a regulator or central bank.
But whilst 36% losses in a week are hardly a good sign, Bitcoin has regained some of the ground it gave up before Christmas, and currently sits around the $14,000 mark – showing signs of a potential recovery. The advice of City Index is to keep an eye on the medium term trends. A continued push above $15,000 could be a sign that the market has kept faith with Bitcoin, and is willing to push its value higher in the long term. However, a sustained period at $12,000 or below is a sign that investors are willing to accept this lower valuation as its true worth for now, which could lead to further losses as speculators move on.
The bitcoin broker firm believes that crypto-currencies are most heavily influenced by market sentiment because they are so far unprecedented, and are not connected to fluctuations in the economy or real-world events, so potential investors should keep a close eye on what the markets are actually doing in real-time to predict where prices will head next.
Featured Spread Betting Brokers
Created with Compare Ninja