Susannah Streeter, Senior Investment and Markets Analyst, Hargreaves Lansdown, comments on the latest wobbles in the value of bitcoin
Bitcoin dipped below $33 thousand by midday on Tuesday and was struggling to gain back ground. It’s been nudging towards half the record price is reached in mid-April of above $63,000. This latest sharp fall in a matter of hours underlines how volatile the currency is, and how it’s swaying in price swept by conflicting appetites for crypto across the world.
Although many fans are still cheerleading the longer term use case for the coin and its rivals, moves by governments around the world to regulate the crypto space or enter it with stablecoins or alternative central bank digital currencies are causing waves of concern about longer term prospects of current crypto assets.
The payments world is in a state of flux, and the rules of the future game have not yet been drawn up. Meanwhile China is acting like the stern parent determined to break up the current party. Beijing has continued its crackdown following the banning of crypto payment services with the suspension of crypto related accounts on the social media platform Weibo.
Although it’s clear that cryptocurrencies in some form will find a place at the table in the financial system, given the interest by large companies and governments, it’s very unclear which of the thousands of cryptocurrencies will retain their value in the future and what role they will play.
Given speculating in crypto assets remains such a high-risk strategy, traders should only commit money they can afford to lose.’’