Bitcoin price: Expert warns this 'key NEGATIVE' is likely to make bitcoin TUMBLE

The bitcoin expert said the “key negative” is Fed tightening – when central banks increase official interest rates, raising the cost of borrowing and effectively reducing its attractiveness.

The Bloomberg News intelligence analyst said: “Since the history of bitcoin, as you can see if we go back a little bit on the chart, here we had a Fed tightening, bitcoin dropped down to below $1000.

“And we go back here and we head to June, we had another tightening and bitcoin drops again. So there’s a correlation there.

“Bitcoin has a tendency to peak with Fed tightening.”

Mr McGlone added that bitcoin was intended to be an alternative currency but it is now the opposite.

He said: “We are tightening. So we are restricting the supply of dollars. We are increasing interest rates of those dollars and bitcoin doesn’t have an interest rate.

“So, to me, that’s part of the key reason it is reverting and it goes down in Fed tightening.

“Since the last tightening, it has dropped 50 percent.”

But crypto expert David Drake said bitcoin could rise to $30,000USD by the end of 2018 if there is widespread adoption by major financial institutions

LDJ Capital Founder and Chairman David Drake said: “I’d say this year is a cryptocurrency Wall Street time and like Dorsey said, and we have said that before as well, we think cryptocurrency on the bitcoin will be worth $30,000 at the year end – it is limited.”

Bitcoin price fell seven percent on Monday, to below $8,000, after Twitter announced it would ban advertising for cryptocurrency products, following Google and Facebook’s own crackdown that aims to protect investors from fraud.

Bitcoin is down more than 42 percent year-to-date after starting 2018 above $13,000.

Bitcoin price is at $7,909.40 at 17:38pm GMT, on Wednesday, according to CoinDesk. It saw its highest value before Christmas when it reached a monumental price of just under $20,000.

Bank of England Governor Mark Carney revealed in March that cryptocurrencies do not pose a risk to financial stability.

In a letter to G20 finance ministers, Mr Carney said cryptocurrencies had the potential “to improve the efficiency and inclusiveness” of both the financial system and the economy.

He added: “The market continues to evolve rapidly, however, and this initial assessment could change if crypto-assets were to become significantly more widely used or interconnected with the core of the regulated financial system.”

A recent survey of 1,000 Americans asked how they would invest $10,000.

The survey found 9.19 per cent of millennials (18-34) would invest the money in cryptocurrencies, compared to just 4.04 per cent of Generation Xers (35-54) and 3.08 per cent of Baby Boomers.