10.40am: The digital currency reached a low of $1843.53 yesterday (Sunday July 16) afternoon after free-falling throughout the weekend.
A week ago, on Monday July 10, the cryptocurrency was changing hands for as much as $2,536.53 – still 10 per cent down its price one month ago. Bitcoin was trading at $2,807.60 on June 20.
Prices have bounced back slightly this morning to $2,086.69 after opening at $1,938.94.
Wolf Richter, the financial blogger and author of the Wolf Street site, says that he expects Bitcoin to continue falling.
“Given the volatility, Bitcoin is not a usable currency,” he told CBS news.
“And given transaction costs, it’s a very expensive form of payment. And it takes a long time to process a transaction. So unless you’re trying to hide your identity, it doesn’t make economic sense to pay with Bitcoin.”
Jordan Hiscott, chief trader at Ayondo Markets, has warned that Bitcoin “could be in an asset bubble that may reach a crescendo within days”.
He compared the “astounding rise” to the technology bubble of 1999.
“This uncertainty and short-term speculation could lead to a deflating of the asset bubble,” he explained.
Bitcoin was originally launched in 2009 with a value of less than a cent, and reached parity with the US dollar in early 2011.
The market has already crashed three times between 2011 and 2014, plunging by more than 50 per cent each time.
The total value of all publicly traded cryptocurrencies – including Bitcoin, Ethereum and Ripple – has dropped by more than $10 billion since Friday.
The market reached an all-time high of $115 billion in June, but has since fallen 38.3 per cent to $71 billion as of 10am Monday morning, according to data from Coinmarketcap, after hitting a low of $63.2 billion on Sunday.