UBS Global Chief Economist Paul Donovan warned bitcoin is a “classic bubble” that will make investors lose a lot of money during an interview with the BBC.
Bitcoin price fluctuations have raised concerns among many financial experts since the cryptocurrency reached $20,000 in value in 2017 and crashed to less than 50 per cent of that in the last few of weeks.
Paul Donovan, Global Chief Economist for the Swiss financial services firm UBS, warned this is a sign bitcoin is a bubble which will cause a substantial loss of money to investors.
Speaking to BBC One Panorama, the financial chief warned: “This is something that to me is a classic bubble.
“It’s an irrational movement in prices and ultimately, I think investors who have put money into this risk losing a lot.”
Currency trends expert Chris Verrone also warned investors to hold off investing in the cryptocurrency until its value stabilises.
Mr Verrone said the crash signalled the financial sector is not prepared to "own bitcoin yet" and said investors should wait before plunging into the crypto market until prices stabilise.
He said: "We are not ready to own bitcoin yet. I think this goes lower before it ultimately goes higher.
"The trend is clearly down: we are down 60 percent from the highs not long ago. Until it stabilises you can’t touch it."
In an exclusive interview with Express.co.uk, financial advisor Ryan Derks explained why the cryptocurrency has suffered the incredible plunge of the last weeks.
He said: “What happened with Bitcoin over the last three to four months is simple physics where there was just so much buying and the price went up so fast, so high, so quickly that it was unsustainable, it had to come down.
“Very much like when you pull a guitar string too high, it doesn’t just go back to neutral, it has to release all of that excess energy. So what we’re seeing right now, in my opinion, is a lot of that excess energy falling out.
“I think it’s just coincidence that this is all just kind of crashing at the moment.”