Bitcoin reached a record-breaking high last week, bounding through the $17,000 point, but just four hours later the world’s largest cryptocurrency plummeted more than $2,500.

This rapid nose-dive reported is, I believe, likely to be the start of significant see-sawing of bitcoin in the coming weeks. Sharp moves are likely, followed by subsequent corrections. This is due to the increased interest in this exciting new alternative currency, and especially with the Chicago Board Options Exchange allowing investors to trade bitcoin futures in the next few days, driving hikes.

This post-rally freefall shines the spotlight on the threat of the bitcoin ‘bursting bubble’. Indeed, investors are likely to get bitcoin-whiplash.

Bloomberg News

I believe we’ll view this as the starting point of cryptocurrencies becoming mainstream. I don’t think they could ever be defined as a fad any longer.

Naturally, bitcoin and other digital currencies will move up and down, as do all traditional currencies. Moreover, as they become more and more conventional, their popularity will increase further still, leading to the introduction of further cryptocurrencies in the future to cater to demand.

All this said, bitcoin remains a major gamble for a number of key reasons.

Bitcoin is an unknown and undetermined asset. It is an almighty gamble because we haven’t got history on our side, we’ve never experienced anything like this before.

Furthermore, an asset that moves on an almost vertical trajectory must be "handled with care." We’ve seen bitcoin reach record highs, which has led to many viewing bitcoin as far too volatile to be seen as a currency, warning that a crash is certainly on the cards in the not-too-distant future.

Indeed, many industry experts are advising investors to "hang on tight."

In addition, there is a lack of essential economic value. While billions of dollars have been invested in bitcoin, its $268bn total market value is still relatively small compared to other asset classes.

However, despite the fall in value after the meteoric highs, bitcoin’s previous rally has sparked interest in and knowledge of cryptocurrencies and further fueled demand.

Therefore, Jamie Dimon, JP Morgan Chase CEO, perhaps one of the highest-profile bitcoin critics, describing it as a “fraud” and something that “won’t end well”, is, to my mind, wholly wrong.

Indeed, the rally emphasises that the already substantial marketplace for cryptocurrencies is increasing, and likely to do continue to so, at a quicker pace, in the coming years. Bitcoin is catering to the evident, flourishing demand and necessity for digital currencies.

The world needs these cryptocurrencies. Perhaps a couple of the existing currencies will succeed, maybe it will be bitcoin, maybe not. However, what is abundantly clear is the dawn of the financial technology era is here. And thriving.