Bitcoin cryptocurrency speculative bubble is burst or emerge? analysist view.

Bitcoin speculative bubble is bursting and has a long way to fall, economists warn

Despite losing 40% in a matter of weeks the cryptocurrency still has further to drop according to experts at Capital Economics 

 

Bitcoin has all the hallmarks of a classic speculative bubble and even after almost halving in value in a matter of weeks it still has further to fall, according to a leading team of ecnomist.

as a regulators in south korea again signalled on thursday that they were dismissed claim that bitcoin and its imitators could replace established currencies as rubbish.

bitcoin, which rose to more that $19000 in december, recovered by 18% on Thursday after suffering  heavy losses in However, even if trading in the currencies is outlawed, Capital acknowledges that the blockchain technology behind the phenomenon will have a lasting impact.  the Luxembourg-based Bitstamp exchange shortly after 2am GMT. other cryptocurrencies include Ethereum  and Ripple.


What is bitcoin and is it a bad investment?

the currency's volatility has alamed regulators around the world and 

suggestions that it could be banned triggered the latest fall. 

 “Most people are buying Bitcoin, not because of a belief in its future as a global currency, but because they expect it to rise in value,” the note says.

Capital’s research note says the latest price falls “suggest that the bubble is bursting” although because the price was still ten times higher than it was a year ago, it still had a long way to fall.

Part of the problem, Capital says, is that despite the claims that cryptocurrencies could replace dollars and pounds one day, the surge in the price was not being driven by any strategic world view but more a simple belief that they will continue to rise in value.

Accordingly,it has all the hallmarks of a classic speculative bubble, which we expected to burst. Triggers for the bubble to burst could be a further crackdown by regulators or a major hacking attempt.

"when it will fully burst is anyone's guess and prices could yet rise again,before
they fall further ahead," they added.

the capital team,led by london-based vicky redwood and kerrie walsh, argue that even if the bubble does burst it should not have too great an impact on the global
economy because the amount of money invested in cryptocurrencies is still relatively small and they are not held by institutions.

 

in south korea,which accounts for up to 15% of daily bitcoin trading, thr chief financial regulator chif told MPs in seoul on Thursday that the goverment was considering shutting down all local virtual currency exchange, days after the idea was raised by the country's justice minister.

"The goverment is considering both shutting down all local virtual currency exchange or just the once who have been violating the law", said choi jong-ku,
chief of finanical services commission.

 the russian and the chinese goverments have also hinted at similar moves

However, even if trading in the currencies is outlawed, capital aacknowledges that the blockchain technology behind the phenomenon will have a lasting impact.