Bitcoin has fallen below £6,500 USD, hurting those who jumped in at the height of the mania late last year, the lowest level since November 2017.
One bitcoin was worth $19,300 at the height of the craze.
If you bought at the peak of the craze, your loss would be roughly 66%. The massive increase in value of the cryptocurrency resulted in many eager buyers attempting to cash in, especially in the lead up to Christmas.
At the beginning of 2016, one bitcoin was worth $450, this rose to $1,000 at the start of January 2017 and then to 20 fold of that before the end of the year.
The rest of the prominent cryptocurrencies have also suffered the same fate, with Ethereum having fallen to $470 from it's peak of $1,300 and ripple and litecoin suffering from similar drops.
An additional reason for the recent decreases was the hacking of Coinrail in South Korea. A haul of $28 million was stolen, with the exchange yet to confirm the exact amounts and currencies involved.
$42 billion in market value has been lost by bitcoin this year which is approximately half of the total cryptocurrency market.
Recent research out of the US suggests that a large part of the rise last year was due to a small number of participants inflating the price.
John Griffin & Amin Shams of the University of Texas have said that price manipulation was a siginificant factor in the recent run in their paper.
Bitcoin is a finite resource and those who have held on to their holdings will be hoping that the supply of new coins runs out soon with 82% now having been mined.
A sound financial plan eschews chasing short term gains in favour of long term, holistic planning, taking a reasonable amount of risk that is appropriate for the client and a sound overall strategy. Speak to your financial adviser. They can construct a plan that is right for you, without relying on fads or trends.
The value of investments and income from them may go down as well as up and you may not get back the original amount invested.
Information is based on our current understanding of taxation legislation and regulations which is subject to change.
Investing in cryptocurrency is highly speculative and the market is largely unregulated. Values are very volatile and can change significantly daily.