Investors should brace for an imminent collapse in the entire cryptocurrency market following a steep decline in the value of Bitcoin over the last year, a new study from Juniper Research has warned.
Transactions had plummeted from an average of 360,000 each day in late 2017 to just 230,000 last month, with values down from more than $3.7bn to less than $670m.
This is despite Brexit uncertainty, ongoing trade disputes between the US and China, and weakness among a number of leading fiat currencies all creating a favourable environment for Bitcoin.
Juniper Research said failure to make gains in these circumstances, and the prospect of closer regulatory scrutiny, had cast doubt on the future of the cryptocurrency.
Moreover, a ban on social media sites like Google and Twitter, and the curtailing of credit card purchases by many financial institutions, are both expected to lead to a further fall in demand.
“While the value of cryptocurrencies will remain high for as long as there are individuals who are willing to pay inflated prices, it appears the base of such individuals is in decline,” Juniper said.
“In short, given our concerns around both the innate valuation of Bitcoin, and of the operating practises of many exchanges, we feel that the industry is on the brink of an implosion.”
The firm also said bodies like the International Monetary Fund would likely demand more stringent licensing in the future, or possibly even prohibit trading all together.
Meanwhile, one of the few economists to predict the 2008 financial crash yesterday warned US politicians that Bitcoin was the “mother of all scams.”
Speaking at a congressional hearing, New York University professor Nouriel Roubini said: “No asset class in human history has ever experienced such a rapid boom and total utter bust and implosion.
“The entire cryptocurrency land has now gone into a crypto-apocalypse as the mother and father of all bubbles has now gone bust.”
The value of global blockchain transactions is set to reach an unprecedented $3.4trn by 2023 as financial institutions increasingly look to the technology to improve their bottom lines.
17 April 2019
Insurance companies will have to offer personalised policies delivered in real-time if they are to thrive in a ‘post digital’ era, consultancy firm Accenture has warned.
12 April 2019
Investment in intelligent automation (IA) technology has failed to deliver fast enough returns, with many projects still stuck in “pilot mode”.
02 April 2019
Why InsurTech? A Pressured Insurance Value Chain
By Andrew Sagon, Andrew Johnston and Matthew Wong
InsurTech is a burgeoning phenomenon that is modernising the insurance industry. It is disrupting the traditional value chain whereby insurers offer loss protection, and shifting the emphasis to risk mitigation. Incumbents face disintermediation as investors in search of higher yields pour money into insurance-linked instruments in the capital markets. And entrepreneurial businesses are targeting friction costs and inefficiencies within every aspect of the traditional value chain.
Nimbleness and agility will unlock potential
By Elinor Friedman, Andrew Harley and Klayton Southwood
Recent Willis Towers Watson surveys in the U.S. have shown that P&C and life insurers in developed markets are taking seriously the potential of big data and predictive analytics to improve their businesses. Nimbleness and agility, rather than brute force, are likely to be key to realizing that potential.
Driven by technology, toolkits and talent
By Claudine Modlin and Graham Wright
Advanced analytics is helping some insurers offer innovative products and solutions. What do insurers need to know about the changing nature of analytics and whether it is worth the investment? Claudine Modlin and Graham Wright discuss technology, toolkits and talent — topics that may help you decide.
Risk transfer is part of a comprehensive solution
By Adeola Adele, Patrick Kulesa, Kevin Madigan and Alice Underwood
Given the dynamic nature of cyber-risk, taking a multidimensional approach that integrates board governance, technology solutions, behavioral change and risk transfer solutions can help reduce risk to a manageable level.