Is the bitcoin rally over?

The white-knuckle Bitcoin ride took another twist Monday as a two-day tumble in the digital currency stoked concern that the polarising cryptocurrency boom may run out of steam.

Bitcoin, the largest cryptocurrency, slid as much as 18% over Jan 10 and 11 to as low as about US$33,500 ($44,532.22). That’s the biggest two-day slide since May last year and follows a record high of almost US$42,000 on Jan 8.

“It’s to be determined whether this is the start of a larger correction, but we have now seen this parabola break so it might just be,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore.

Bitcoin’s price has more than quadrupled in the past year, evoking memories of the 2017 mania that first made cryptocurrencies a household name before prices collapsed just as quickly.

True believers in Bitcoin argue the difference this time is the asset has matured with the entry of institutional investors and is increasingly seen as a legitimate hedge against dollar weakness and inflation risk. Others worry that the rally is untethered from reason and fueled by vast swathes of fiscal and monetary stimulus, with Bitcoin unlikely to ever serve as a viable currency alternative.

“Bitcoin is almost certainly in another bubble and its current growth rate is not sustainable,” Howard Wang, co-founder of Convoy Investments LLC said in a Jan 10 note. “While it may mature in the future, Bitcoin as it exists is largely a speculative asset.”

Bitcoin has shrugged off recent dips and may do so again, potentially recovering to as much as US$44,000 “before the actual correction,” Luno’s Ayyar said.

The coin pared some losses Monday and as of 2.03 pm in Tokyo was around US$35,600. Rival digital assets are also slumping, with second-largest coin Ether tumbling as much as 20%.