Bitcoin has experienced a sudden surge in value after several days of plummeting prices. The world’s leading cryptocurrency climbed $600 (£460) in the space of a few hours to return above $7,000, having briefly fallen to its lowest level since May.
The price crashes on Friday and Monday came after market uncertainty surrounding developments in China, which saw a renewed crackdown on illegal exchanges in the country. Despite the significant dips, some cryptocurrency experts claimed that it was the “perfect time” to invest.
This year has been delightfully kind to bitcoin buyers, providing an 88% return year-to-date. If you bought one bitcoin on Jan. 1, 2019, your investment (of $3,750) would now be worth about $7,000.
Some analysts have blamed the downturn on China, which—after briefly embracing blockchain—renewed its crackdown on cryptocurrency exchanges. Since late 2017, the country has officially banned crypto trading, but a thriving underground economy remains for over-the-counter, or person-to-person, swaps.
“Once again the value of bitcoin has fluctuated– due to the nature of cryptocurrency, this is not the first, nor will it be the last time this occurs,” Peter Wood, CEO of online trading platform CoinBurp, told The Independent.
“However, new-time investors can be comforted by the fact that its value will most likely rise again, and newcomers to cryptocurrency should see no better opportunity than to invest now.”
The price of bitcoin is notoriously difficult to predict due to its volatility, which has seen it fluctuate between $3,000 and $20,000 over the last two years.
“While nobody really knows what direction the value of any cryptocurrency will head in the near future, past trends display a possible large increase within the next 12 months at least,” Mr. Wood said.
Some of the more optimistic predictions for bitcoin include venture capitalist Tim Draper’s forecast that the cryptocurrency will reach $250,000 by 2023, and cybersecurity pioneer John McAfee’s bet that it will reach $1 million by the end of 2020.