Bitcoin’s price plunged to $58,400 (€51,000) on Tuesday and hovered just under the $60,000 (€53,000) threshold on Wednesday as the crypto market is again becoming a sea of red.
It marks a 12 per cent drop from the record high of $69,000 (€61,000) set on November 10.
The second-largest crypto Ether meanwhile plunged more than 14 per cent since its record last week to reach $4,244 (€3,7500).
The reasons why cryptos have been so volatile of late is unclear but there are a number of factors at play.
One reason may be due to market manipulation, argues David Gerard, the author of the book Attack of the 50 Foot Blockchain. And it is all to do with Tether, a blockchain-based cryptocurrency whose tokens are backed by an equivalent amount of US dollars.
Tether pumping up prices
"Tethers are supposed to be all backed by dollars. There's a lot of reasons like settlements with the authorities that suggest this has not been the case in the past, and we shouldn't presume it's the case now," Gerard told Euronews Next.
"So it looks like three billion Tethers, backed by nothing, were used to pump the Bitcoin price up at this particular time.
"When they stopped, the Bitcoin price dropped. That's basically the story of the shenanigans that went on in the last week or two".
Gerard argues this kind of market manipulation and fake liquidity happens all the time.
"The basic thing that happened was the Bitcoin price, we know it's highly manipulated because this is an unregulated pool for sharks," he said.
"I think some fake liquidity was deployed. About $3 billion (€2.6 million) worth of questionable liquidity was deployed, which was used to pump the price up.
"That's the sort of manipulation that goes on in the Bitcoin markets all the time," Gerard added.
"Normal people look at this stuff (the crypto market) and think, 'Oh, that's a good market,' but they're the meat, they're the suckers, and the money comes from.
"This is a big boys game. And you'd better be prepared to be eaten alive," Gerard warned.
The other reason for the crypto price slide is the continued fallout from China’s crackdown on Bitcoin mining, which led to an exodus of miners to the US and Canada.
China’s National Development and Reform Commission said on Tuesday it would continue to regulate crypto mining due to concerns over the amount of energy being used.
Gerard points out it is not just because of mining regulation that crypto prices have slumped. He argues those exiled miners have a billion dollars of Bitcoins that they are keeping as stockpiles and not selling them.
"No one can really account for this because Bitcoin miners have never behaved like that, except when they can't sell the coins because there aren't enough people with dollars to buy them.
"I think what's happening there is that all the dumb retail dollars have gone home and the markets are very thin at the moment, and that's why they're having to inflate them in artificial ways," said Gerard.
Cryptos may also have been affected by comments by Twitter’s Chief Financial Officer Ned Segal on Monday. He said investing in crypto “does not make sense right now”.
"We (would) have to change our investment policy and choose to own assets that are more volatile," Segal said.
But the hype around cryptocurrencies and blockchain has not dwindled. On Tuesday, the Staples Center in Los Angeles said it would be renamed the Crypto.com Arena, making it reportedly one of the biggest naming rights deals in history.