Tesla founder and entrepreneur Elon Musk sparked a Bitcoin frenzy earlier this year after he invested in the cryptocurrency. Tesla bought $1.5billion’s (£1.1billion) worth of Bitcoin, leading to values reaching a record high. The car company also announced it would allow people to buy a Tesla vehicle using Bitcoin. However, this wasn’t enough to prevent Bitcoin values fluctuating as they have done for many years.
Having reached a new high of $62,000 (£45,100) last Tuesday, Bitcoin slumped once more last weekend, falling 10.1 percent to $54,000 (£39,000) where it remains.
While prices regularly rise and fall, Bitcoin’s year-on-year value has increased.
This has led many to be very optimistic about the future of the cryptocurrency.
Jesse Cohen, senior analyst at Investing.com, told The Independent in February that its value will reach $250,000 (£180,000) by July.
He said: “It’s been a blockbuster year so far for Bitcoin, whose gains have left other assets in the dust.
“We expect strong institutional demand to continue in months ahead, eventually driving Bitcoin prices to above the $100,000-level, with prices peaking at around the $250,000 mark by July.”
David Sacco, an expert in cryptocurrencies from the University of New Haven, told Express.co.uk earlier this year that Bitcoin will one day reach the $1million (£722,000) mark.
He said: “Companies tend to do what other companies do, especially if something is seen to be effective.
“Other companies will follow suit because they’ve seen the results.
“There’s the scarcity associated with it, I think we are at the tip of the iceberg of people’s acceptance of it.
“We have a globalised economy in which people have less trust in global institutions, making Bitcoin an appealing prospect.
“I wouldn’t bet against Bitcoin hitting a million dollars in my lifetime, even in the next five to ten years.”
Some are more sceptical though.
Another expert told The Independent in February that a “crypto winter” is around the corner as a crash will wipe up to 90 percent from its value.
Bobby Lee, founder of cryptocurrency exchange BTCC, predicted that Bitcoin could rise a further 500 percent before the market downturn takes place, building on the massive gains it has experienced over the last year.
He said: “Bull market cycles come and go and after a bull market peak, inevitably it could go down by quite a bit, and that’s when the bubble bursts. It can last from two to three years.
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“After it peaks out – whether it’s $200,000 (£144,000), $100,000 (£72,000) or even $300,000 (£216,000) – people should be aware that it could fall by 80-90 percent of its value from its all-time peak.”
Britain’s Financial Conduct Authority (FCA) warned investors of the risks that come with Bitcoin following the recent slump.
They said: “If consumers invest, they should be prepared to lose all their money.
“Some investments advertising high returns from crypto assets may not be subject to regulation beyond anti-money laundering.
“Significant price volatility, combined with the difficulties valuing [Bitcoin] reliably, place consumers at a high risk of losses.”
Express.co.uk does not give financial advice. The journalists who worked on this article do not own Bitcoin.