The price of bitcoin plunged earlier this month following a series of setbacks. Tesla CEO Elon Musk announced on Twitter this month that the company will no longer accept bitcoin for purchases of Tesla vehicles. In another blow, China also announced it was banning all financial institutions and payment companies from providing services related to cryptocurrency transactions. On Wednesday, Iran announced it would implement a four-month ban on bitcoin mining after suffering rolling power blackouts in its capital of Tehran and in other cities.
However, some positive news for the world of cryptocurrency was announced by PayPal on Thursday.
The payment service will now be adding cryptocurrency support to its offering, allowing customers to transfer bitcoin and other cryptocurrencies to third-party wallets, along with buying, selling and holding.
According to CoinDesk data, as of Thursday afternoon bitcoin was priced at $40,111.75 (£28,300.76), a 24-hour change of 1.76 percent.
Bitcoin also had a market cap of $750.86 billion (£529.76 billion).
He added: “It is largely trading between support and resistance levels (£40,000 and £60,000 respectively).
“With great caution, the overall sentiment is probably upward trend but recent developments [Chinese government taking action to curb the trading and mining of bitcoin, remarks by Elon Musk and action by Tesla to stop accepting bitcoin, liquidation etc.] are masking its longer term trend.”
Rick Eling, investment director at Quilter, told Express.co.uk: “Bitcoin’s current woes should serve as a strong reminder for investors to always interrogate rigorously why we are interested in investing in something in the first place.”
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Due to the volatility of cryptocurrencies such as Bitcoin, Mr Eling explained how there are “far more effective” methods for making money.
He added: “Getting rich slowly is a far more effective way of growing your money and giving you stability in your future life.
“Diversified, multi-asset portfolios will guard you against violent swings in asset prices and ensure your long-term objectives are achievable.
“Bitcoin will not do this and the logic for investing in it is not sound. If we say that bitcoin is a currency, then it must get to a point of broadly stable value in order to function as a currency.
“Successful currencies do not have wildly fluctuating values such as this. But if we also say that bitcoin will “make us money” then it can’t also have a stable value. We reach a circularity.
“In other words, the premise on which people claim bitcoin has long term value [that it will become an accepted currency] argues against its future growth potential.
“Those who have made money from cryptocurrencies have much more luck than they do skill.”