The price of bitcoin has plunged almost 25 percent since hitting a two-and-a-half year high last week amid problems at a key exchange and diminishing fears of a Brexit.Bitcoin was trading around $590.53 by midday London time, a fall of around 23.8 percent from the $774.94 close on June 17, which marked the highest close since November 22, 2013.The initial rise in the price of the cryptocurrency came last week as traders prepared for a process known as "halving" – where the rewards offered to bitcoin miners fall, thus tightening the supply of the digital currency.With anticipation of less supply, prices spiked.Key exchange shuts down But sentiment was dampened when earlier this week, Hong Kong-based bitcoin exchange Bitfinex was closed for a few hours because of "networking issues" in the company's data center, it said on Twitter.The issues were fixed on the same day.Bitcoin insiders said that because of the high leverage people trade the digital currency with, small issues in the market can cause big moves.

"The bitcoin price when it goes up is always fuelled by a high leverage, people using margin borrowing money to buy up the price anticipating the block rewarded halving, so the smallest hairline crack can cause a selloff," Bobby Lee, chief executive of BTCC, one of the largest bitcoin exchanges in the world based in China, told CNBC by phone on Thursday."Bitfinex's website went down and that was a catalyst for people pulling back, cutting positions, locking in gains.There is waterfall effect where then people are selling, selling, selling."Brexit moves At the same time, bitcoin has received some safe-haven bids in recent weeks thanks to uncertainty about which way Britons would vote in the country's referendum on its membership of the European Union (EU), which began on Thursday morning.But opinion polls leading up to the referendum showed a slight bias towards the remain camp winning, helping push financial markets and the sterling higher, but causing a fall in the price of bitcoin.

"I do think it's primarily macro things such as Brexit, you saw the price run up as you saw the opinion polls show leave was winning and as those polls reversed over the weekend, that's when we saw the price reverse" Tom Robinson, co-founder of blockchain start-up Elliptic, told CNBC by phone.bitcoin to inr priceYuan effect Conversely, the threat of a Brexit had an adverse effect on the Chinese yuan, which hit a five-year low last week, was also a reason cited by experts, given China accounts for the large amount of bitcoin trading.bitcoin dollar graph"Brexit could be a major factor, but, since the lion's share of bitcoin trading activity occurs in and around China, it's unlikely that this is the primary cause.bitcoin 456Although if you look at the bitcoin price among exchanges based in China they are $10-20 lower than the global exchanges, this might reflect the yuan's 5-year low and the expected yuan volatility as a result of Brexit," Aurélien Menant, CEO and co-founder, Gatecoin, a digital currency exchange, wrote in an email to CNBC.konto na bitcoin

Menant added that he expects the volatility "to settle down within the next couple of weeks".2015 was Bitcoin’s biggest year thus far when it comes to startup investments, and the industry as a whole has been able to raise roughly $1 billion in venture capital funding up to this point.bitcoin kaufen per paypalWhile this may seem like a solid step in the right direction to some, Cypherpunk Vinay Gupta sees things getting much crazier in 2016.bitcoin difficulty listOn a recent episode of Epicenter Bitcoin, Gupta claimed there will be $10 billion in funding for blockchain-related startups this year.During the early portion of Vinay Gupta’s interview, he noted he’s currently looking at the trends in the blockchain ecosystem and trying to figure out what will take place in 2016.bitcoin 11th march

One of the first things he pointed out is the lack of funding for most blockchain-related startups up to this point.He noted:“I think, up until now, the entire field has been largely limited by available money.It’s been quite hard to raise funds for projects; there’s been a lot of curiosity from funders, but not very much action.”Gupta then pointed out that R3, the startup building a permissioned blockchain for a consortium of the world’s largest banks, has the power to reverse this trend.bitcoin mining software laptopHe stated:“I think that R3 has kind of tipped the entire ecosystem into a different gear.bitcoin is a cultIt’s legitimized this notion that blockchains are a technology that is critically important to banking, and at that point, the money is seriously beginning to flow into the field.”Although banks now believe blockchain technology could help them cut costs and provide more efficient money flows, faith in the Bitcoin blockchain and bitcoin as a currency still seems rather low.

Having said that, many Bitcoin supporters, including Digital Currency Group Founder Barry Silbert, believe banks will eventually come back to Bitcoin after realizing the benefits of an open, permissionless ledger.Vinay Gupta also made the point that talent may soon be hard to find in the blockchain industry.With tons of new money pouring into the space, it may be difficult for startups to find individuals who have the necessary experience with this new technology.Gupta explained:“So I think that this is the year where we’re going to go from it being scarce money and abundant talent to it being abundant money and scarce talent.And I don’t think any of us really know how to operate in that environment — we’re so used to having to bang on the doors.Now that the doors are largely auto-opening, I think we’re going to have a fair amount of chaos.”Now that R3 has essentially brought blockchain technology into the mainstream, it’s possible that a number of startups will be created that don’t make much logical sense, much like the early days of the Internet.At this point in the interview, Epicenter Bitcoin Co-Host Brian Fabian Crain asked Vinay Gupta if he was predicting a blockchain bubble similar to the dotcom bubble of the late 1990s.

Gupta responded:“It’s already started.I mean, my estimate is that we’re going to see $1 billion come into the Ethereum ecosystem in 2016 alone, and the general estimates for the amount of money going into the entire blockchain ecosystem, including Bitcoin, is on the order of $10 billion.”Crain was shocked by Gupta’s response, but the longtime cypherpunk used two pieces of evidence to back up his claim.Gupta first pointed to a leaked JPMorgan report that revealed the bank’s plans to “aggressively pursue” innovative technologies such as blockchains, big data, and robotics.According to Business Insider India, JPMorgan has put aside $9 billion for such investments.Gupta then pointed to Singapore and their $7 billion smart cities program.He added, “[Singapore] is seriously interested in blockchain stuff.There’s just a really, really broad-based push for large entities to get this technology into their systems.”Investments in blockchain technology do not necessarily lead to investments in Bitcoin, so the community will have to wait to see how much of that possible $10 billion finds its way to startups building around the world’s first blockchain.