Bitcoin price continued to drop after the Christmas holiday’s fiasco when virtual wallet holders saw the cryptocurrency declining for four consecutive days.
Mr Garrity said the cryptocurrency will need to strengthen its “fundamental underpinning” to shed its speculative nature.
He said: “Are we starting to see these killer applications start to develop that lead to greater mass adoption relative to the blockchain protocols that are underlying and supporting these cryptocurrencies?
“To have a price move that is not really being matched by what’s going on in the real economy in terms of driving activity and goods and services says that something is more of a speculative nature than something that actually has fundamental underpinnings.
“Clearly you need to have a confirmation, if the prices are moving up, you need to see what is going on in the real world.”
The cryptocurrency saw its highest value in December when it reached the staggering price of just below $20,000.
Financial experts have discouraged people to buy and trade with bitcoin due to its incredible volatility. Most of them are of the opinion it is a bubble ready to burst.
Mr Garrity explained the bitcoin price breakthrough recorded in December created a gap that weakened the value of the cryptocurrency in earlier January.
Speaking to Bloomberg, he continued: “This move from $5,000 to $20,000 created a huge gap and typically what happens around markets with breakout moves is you need to have some backing and fillings.
“From a trading point, sentiment is driving the market because, as of yet, we don’t necessarily have mass adoption on the part of bitcoin for payment purposes.”
Earlier in January, news of South Korean regulators pushing for a ban on crypto trades triggered a panic sell-off of the top cryptocurrencies.
Up to $300billion (£216billion) was truck off from the total market capitalisation of the crypto market, and tokens such as bitcoin, Ripple and Ethereum crashed.
The Indian Government has now sparked fears of further crackdowns, sending investors into a selling frenzy causing another drop in the value of bitcoin, Ripple and ethereum.
According to Coindesk, bitcoin was trading for $10,707.76 on January at 2.28pm GMT – with Ripple trading for $1.25 and ethereum for $996.47 at 2.28pm.
It comes as European Union’s financial watchdogs are seeking to burst bitcoin’s bubble to avoid a price boom after cautious regulators have watched its price soar to nearly $20,000 (£14,391) in 2017.
Valois Dombrovskis, vice president of the European Commission, has cited “clear risks for investors and consumers associated with price volatility”.
The UK’s Financial Conduct Authority has also issued warnings, one of which covers “initial coin offers”.
The term describes a way of raising funds where issuers accept a cryptocurrency, like bitcoin, in exchange for a token that represents something related to a firm or project.
But Shopin CEO Eran Eyal said he has “no doubt” bitcoin will reach a value of beyond $100,000 in the future.
Mr Eyal said it is important to separate bitcoin from other types of cryptocurrencies such as ethereum or Ripple. He said each cryptocurrency has its own “business model” to differentiate from one another.
He also said all cryptocurrencies are different. He used the example of ethereum and said it is a platform for building “exciting technologies”.
He added that it is “impossible” to look at bitcoin and ethereum and compare one to the other because “they are not both apples”.
This article was curated from Google News. You can read the original article here.