THERE are mounting fears that Bitcoin investors will struggle to get their cash out after the cryptocurrency’s value fell 40 per cent in a single month.
Many are looking to put their money in gold instead, with some European gold traders reporting a “five fold increase” in demand amid fears Bitcoin could collapse entirely.
But it could be bad news for investors tied up in Bitconnect who fear they will lose their money after the controversial trader announced it was shutting down.
It assured customers they would be able to withdraw at a “recent exchange rate” but “continuous cyber-attacks” have prevented them from doing so, Fortune reports.
Concerned investors have since taken to social media to complain they fear losing anything from a few thousand dollars to their entire “family savings”.
Adding to fears, some panicked investors have reportedly been tricked into handing over the contents of their cryptocurrency wallets by scammers presenting themselves as Bitconnect “customer support”.
Wall Street veteran Peter Boockvar has warned of an impending “epic crash” which could slash 90 per cent off Bitcoin, currently valued at around £8,300.
He told CNBC the cryptocurrency’s value could fall to between $1,000 (£718) and $3,000 (£2,154) over the next year.
This uncertainty is driving Bitcoin owners to invest in the more reliable gold, according to Daniel Marburger, director of Coininvest.
He told the Times how he sold 30kg of gold worth around £1million on “one crazy day” – January 16.
Marburger added: “It is an unprecedented time and shows the sway from bitcoin and other cryptocurrencies back to a solid, robust investment in these uncertain times.”
Investors are believed to mostly be exchanging their Bitcoins for sovereign coins of gold Britannia, one ounce of which is worth around £,1000.
The largely untraceable Bitcoins are beneficial to criminals who can use them to buy drugs and weapons on online black markets on “The Dark Web”.
They are less useful for everyday consumers who cannot buy goods or, say, invest in properties using the cryptocurrency.
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Other gold merchants including Goldcore reported similar trends.
Its founder Mark O’Byrne said: “They [the bitcoin sellers] told us they were concerned that the massive price appreciation was unsustainable and they got nervous about it.”
One in three British millennials will have invested in a cryptocurrency by 2020, according to the London Block Exchange.