'Bubble Is Bursting': Analysts Predict Global Slump of Cryptocurrencies

"Claims that cryptocurrencies will replace established fiat currencies are rubbish; our view is that Bitcoin is a bubble. Indeed, the latest price falls suggest that the bubble is bursting – although with prices still ten times higher than a year ago, they have a lot further to fall yet," the review published on Wednesday read.

The reasons for the bubble's burst may be further protective measures of the world regulators or a major attempt to break into the network, the analysts believe. According to Capital Economics, the current fall of bitcoin will not have a big impact on the world economy, since its capitalization is still relatively small.

According to the CoinMarketCap, Bitcoin was down 3.81 percent to $10,858 as of 20:54 GMT Wednesday after a deeper fall earlier in the day.

At the Bitfinex cryptocurrency exchange trading platform, it was almost flat at around $10,950, having recovered after drop to around $10,000 earlier in the day. Bitcoin peaked at more than $20,000 in mid-December.

Most analysts attribute the recent fall of bitcoin to news from South Korea and China, where the authorities intend to tighten control over the cryptocurrency market.