BITCOIN investment is going to cost speculators large amounts of money as the cryptocurrency is set to face a "severe" value correction in the coming months, economic trend expert Byron Wien said.
Bitcoin could cost speculators big chunks of their investment assets because of the volatility of the cryptocurrency.
He said: "Bitcoin is its own thing. Maybe affecting some speculative interests on the part of equity investors but bitcoin, I think, is a magnet for speculators and people who are willing to take very high risks for very high gains.
"But also very high chances of losing money."
The crackdown on Seoul-based operators of some of the world’s busiest virtual currency exchanges comes as the government attempts to calm frenzied demand for bitcoin and other cryptocurrencies trading in Asia’s fourth-largest economy.
The Government said in December it would apply more scrutiny to the exchanges, including attempts to stop anonymous trading.
The decision was interpreted as a signal for a sell-off in cyber-currencies and resulted in the crash in the market.
Mr Wein also said bitcoin was likely to be subject to value readjustment in the coming months
Ripple officials have blamed CoinMarketCap’s decision to exclude data from South Korean markets for the recent crash.
Ripple’s chief cryptographer David Schwartz bemoaned the move on Twitter, accusing CoinMarketCap of sparking “panic selling”.
Meanwhile Greg Dwyer, head of business development at cryptocurrency derivatives exchange BitMex, explained that excluding South Korean markets caused mass confusion.
”Every crypto is priced at a 30 percent premium in South Korea,” he said.
"By removing that, it looks like the market cap fell by 30 percent and so people rushed to sell because they're not sure what's happening.”