Bitcoin has gone from strength to strength during the first half of the year, but the virtual coin has shown signs of its infamous volatility over the past few weeks.
Following a tortuous 2018, when values slumped from an all-time high of $20,000 (£16,470) per coin in December 2017 to just $3,870 (£3,190) 12 months later, prices have gradually climbed over the course of 2019.
But after peaking at $13,040 (£10,740) in the middle of July, prices then fluctuated wildly in the ensuing weeks, according to figures from ranking site CoinMarketCap.
As of 2.30pm today UK time, bitcoin prices sit at $9,980 (£8,220), some $1,000 (£820) off yesterday’s high and almost $2,500 (£2,060) down on the virtual coin’s August high, the ranking site reports.
What’s causing prices to stagnate?
Uncertainty appears to be the key factor behind bitcoin’s current volatility.
Some analysts have speculated that falling bitcoin prices may be the result of the ongoing trade war between the US and China, while others claim that uncertainty about Britain’s future after it is due to leave the European Union on 31 October, Forbes reports.
Another factor may be the US Securities and Exchange Commission (SEC) opting to delay its decision on three bitcoin exchange-traded fund proposals, the news site says. The ruling isn’t expected until the end of September or even mid-October, meaning investor activity in the US may stall until a decision is made.
But Mati Greenspan, a senior market analyst at eToro, believes that there’s little to suggest that recent global events are affecting the market.
“Many analysts have been doing their best to tie in the latest moves in the crypto market to the uncertainty in geopolitics but it’s difficult to say exactly how much connection there really is,” he told Forbes.
Where will bitcoin values go next?
The Daily Express claims that similar market trends occurred in 2018, when bitcoin “spent much of the second half of the year unwilling to stray north or south of $6,400 (£5,280)”. This year, however, it predicts that bitcoin will arrive at a “crossroads” and prompt more radical price movements over the coming months.
“Cryptocurrency being what it is means that an array of curious market forces is always at work and anything could happen,” the newspaper says. “There are few certainties here.”
In the meantime, though, the bitcoin market appears to be building a “bearish momentum”, potentially sending values downward over the coming days, according to cryptocurrency news site FXStreet.