The managing director at eTorro, Russia, said the influx of “mass-market consumers” looking to join the cryptocurrency trend led to the sudden surge in price for bitcoin, which reached highs of around $20,000 in December.
Mr Verbitsky told RT: “Many people behind bitcoin and cryptocurrencies as a whole understand that the skyrocketing prices in the last few months are linked to cash inflow from mass-market consumers. Even pensioners wanted to invest.
“Experienced investors knew that the bitcoin honeymoon couldn’t last forever. Those who catch the last train are usually punished by the market.
“Big-time miners and investors understand that they needed to diversify, that they hard to get some fast money. People who raised money on the ICOs had to pay wages to developers.”
Despite its massive highs, bitcoin has also faced huge slumps in price after reports that the Chinese Government is planning to shut down bitcoin miners in its latest crackdown on the cryptocurrency.
China is one of bitcoin’s biggest producers, with miners located in the Asian country using the energy-intensive process of solving complex math problems to add transactions to the blockchain.
China is planning to limit electricity to bitcoin miners after government bodies expressed concern about its energy usage.
Mr Verbitsky said he believes the prices may remain stagnant for around six months after the reports prompted huge sell-offs of bitcoin.
“It was about pure greed,” he said. “Of course, after they lost a third to a half of their investments, they pushed the sell button. A consolidation around $12,000 and $14,000 can now be expected.”
Speaking ahead of the World Economic Forum in Davos, Switzerland, Richard Shiller questioned the cryptocurrency, claiming he “doesn’t know what to make of bitcoin ultimately”.
Ahead of his Davos address, he told CNBC: “It has no value at all unless there is some common consensus that is has value.
“Other things like gold would at least have some value if people didn’t see it as an investment.
“It reminds me of the tulip mania in Holland in the 1640s, and so the question is did that collapse?
“We still pay for tulips even now and sometimes they get expensive. Bitcoin might totally collapse and be forgotten and I think that’s a good likely outcome but it could linger on for a good long time, it could be here in 100 years.”
Bitcoin is currently valued at $12,585.82, according to Coindesk.com, at 2.18pm GMT, on January 20.
Ethereum, is currently valued at $1,132.44, according to Coindesk.com, at 2.39pm GMT, on January 20.
Ripple is currently valued at $1.56, according to Coindesk.com, at 2.35pm GMT, on January 20