Expert’s Bitcoin warning: Until it stabilises you can’t touch it
Bitcoin's price plummeted to a two-month low last Friday after going through an unexpected growth spurt shortly before Christmas.
Mr Verrone said the crash signalled the financial sector is not prepared to "own bitcoin yet" and investors should wait to plunge into the crypto market until prices stabilise.
He said: "We are not ready to own bitcoin yet. I think this goes lower before it ultimately goes higher.
"The trend is clearly down: we are down 60 percent from the highs not long ago. Until it stabilises you can’t touch it."
Bitcoin crashed down to $6,968.8 at 2:43pm on Tuesday after UK high-street bank Lloyds banned all cryptocurrency payments on its credit cards.
The ban extends to other household names in the banking giant's credit card family including Bank of Scotland, Halifax and MBNA.
Wallet holders would have been hoping for a better start to the week but news of another mainstream finance firm being spooked by price volatility and regulatory threats means that other credit cards retailers around the world will be studying the fallout from Lloyds' ban.
Concerns have arisen among credit card providers because their customers have increasingly been using credit cards to fund accounts on online exchanges, which are then used to purchase the digital currencies.
Last week Mastercard, the world's second-biggest payments network, said customers buying cryptocurrencies with credit cards fuelled a 1 percent increase in overseas transaction volumes.
But Mr Varrone remained optimistic about bitcoin, saying it was "too early" to declare bitcoin was completely finished.
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Until it stabilises you can’t touch it
He told Bloomberg: "Despite a 60 percent drawdown, bitcoin is still above its 200-day average. Look at the 200-day average as the place where this ultimately shakes out.
"I think it’s too early to say this is finished forever. This is a really really good shake out after an exceptional move."
The financial consultancy deVere group predicts demand cryptocurrencies will “skyrocket” in the next 12 months.
Bitcoin, the group claim, could gain by 50 to 60 percent and will remain highly volatile as it comes under “increasing pressure” from ethereum and other cryptocurrencies.
Bitcoin's competitor XRP Ripple is also expected to see price soars over the coming months should the firm succeed in striking new deals with major financial companies.
Ripple’s advantage over other currencies is its near-instant international payments, which are processed in just 10 -15 seconds.
Ripple was trading for $0.69 at 2:43pm while third cryptocurrency big name ethereum was selling for $706.13.
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Last week the Ripple team completed two new partnership agreements.
The first was with the telecom company IDT and the second was with international payment service MercuryFX.
Ripple will also test the functionality of xRapid Ripple, based on the Ripple token (XRP), which has been designed to lower commissions when making payments.
Christopher Giancarlo, the chairman of the Commodity Futures Trading Commission (CFTC) and Jay Clayton, chairman of the Securities and Exchange Commission (SEC) will appear in front of the Senate Banking Committee today where they will discuss the potential future of virtual currencies.
Bitcoin’s value has dropped by more than 60 percent in the last month as the cryptocurrency continues to free fall following an incredible spike, according to leading market tracker Coinable.
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Meanwhile, Ethereum, Ripple, Litecoin and Bitcoin Cash have all experienced downward trends.
Sources in Congress have stated that the hearing will be a “fact-finding exercise” that will discuss the power of the two bodies on cryptocurrencies.
Both Mr Clayton and Mr Giancarlo will suggest that the current regulatory system’s patchwork to cater to the rise in prominence of cryptocurrencies should be altered.
Back in December, bitcoin hit an all-time high of £13991.86 ($19,535.70) on December 17 before sharply declining.
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Having dropped below $6,000, bitcoin made a slight resurgence amid the turbulence of the Dow Jones, which sent shockwaves across every major stock market around the world.