The downward spiral of Bitcoin [BTC] in the recent past despite getting opportunities to capture the market points at a bleak future for the cryptocurrency, according to a UK-based researcher.
The study conducted by Windsor Holden analyses why Bitcoin could not emerge as a viable substitute for traditional currencies, even when the market was suffering from shocks like “the Brexit and US-China relations”.
The report states that the year was “ideal” for digital currencies to step up as an alternative to traditional currencies. Almost all government-backed currencies suffered a setback due to Brexit and growing trade links between China, EU, and the US.
According to Holden, this points at the incapability of digital tokens to replace live currencies. He says:
“If Bitcoin cannot make gains in such favorable circumstances, then it is unlikely to prosper as and when these issues are resolved… We feel that the industry is on the brink of an implosion.”
The most prominent digital token of the modern age, Bitcoin, saw a relatively bad year with its price dropping 52% since January 2018. Currently hovering around the $6,270 mark, Bitcoin had neared $20,000 in value around December 2017 before suffering a major dip.
Even when it was at a career-high, Bitcoin was almost downright rejected by Wall Street as well.
The most influential CEOs, including Warren Buffett and Jamie Dimon, had issued warnings against involving in Bitcoin trade. Adding to this, Nouriel Roubini, an economics professor, and market expert, also criticized Bitcoin and blockchain and branded it the biggest of all bubbles.
“Juniper’s research that the firm “is aligned far more closely with the cryptocurrency skeptics than the evangelists; we do not believe a recovery to the levels witnessed in 2017 is likely… Indeed, we would argue that further falls are highly probable.”
With the strongest player down, other cryptocurrencies also faced a backlash, with most of their prices dropping almost 60% this year. Holden attributes this to the decline in the number of investors interested in buying cryptocurrencies when the prices are inflated.
He also states regulations on spending money on tokens by credit card companies and advertisement as the other reasons for this.
According to him, this means that there will be fewer funds available to invest in BTC due to lesser demand.
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