Reason Bitcoin cryptocurrency is STRUGGLING in January and why RISE is likely

BITCOIN’S sharp decline in January is not out of the ordinary and has been credited to a sharp rise of South East Asian residents selling off the cryptocurrency to raise money for the lunar year, an economics lecturer has claimed.

Gavin Brown, from Manchester Metropolitan University, declared that South Korea and China, two areas where bitcoin is incredibly popular, could be a reason for the sharp decline in market value for bitcoin in January.

Mr Brown added that bitcoin owners in the region could be selling off their prized coins to make a fortune to spend on celebrations to mark the event.

Bitcoin is no stranger to seeing a sharp decline in the month of January - last year the currency rose by only 0.51 per cent while 2016 and 2015 saw decreases of 12.7 per cent and 27.3 per cent respectively.

The claims from Mr Brown hint that the fall in value could be temporary.
He explained: "2018 has so far been defined by regulatory uncertainty in the far East, causing even more volatility than usual.

"However, investors seem to be getting confident that we’ve reached a secure entry point and are comfortable buying again.

“In the grand scheme of things, this seems like a short-term blip."

South Korea’s clampdown of bitcoin has been a significant factor in its sharp value decline - yesterday the country demanded that the veil of secrecy surrounding bitcoin transactions be removed as the government planned to only allow accounts with a users' real-name to be used in transactions

The plan would make sure local banks only allow accounts headed by the users’ real name when they are making cryptocurrency transactions.

Real names will have to be used starting from January 30.
Meanwhile, the head of investment strategy at Barclays, Will Hobbs, labelled bitcoin “elusive” as he claimed that putting money into the virtual currency is more of a “bet” than an investment.

He explained: "In a sense, until you can detect a positive intrinsic value for Bitcoin, something which remains elusive until it can find a role for itself in the economy, Bitcoin is not so much an investment as a bet."

The Barclays boss stated that the “volatility” of bitcoin means it is unlikely to be used as a “mainstream currency” after its value dropped lower than £7,190 ($10,000) last week.

He went on: "The outsized volatility of Bitcoin still makes it unlikely to be a stable store of value or medium of transaction anytime soon - both of which are important traits of mainstream currencies.

"For private clients, the volatility is still a multiple of what most would be comfortable within a portfolio context all the same. It remains difficult to see when that will subside into something a little less hair raising.”

Bitcoin has seen a 50 per cent drop from the extraordinary highs it reached at the end of last year - the incredible rise saw an unprecedented spike in the popularity of virtual currencies.