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The nature of bitcoin is similar in many respects to infectious diseases, wrote Barclays analysts. They explain the current bitcoin price decline by epidemiology fundamentals.

Analysts at Barclays went as far as comparing cryptocurrencies to an ordinary flu. According to them, all cryptocurrency investors can be divided into three groups, susceptible, infected and immune.

In their letter, analysts led by Joseph Abate in the New York office of Barclays tried to build a pricing model for valuing an asset, based on the laws of epidemiology.

“As more of the population become asset holders, the share of the population available to become new buyers -- the potential ‘host’ population -- falls, while the share of the population that are potential sellers (‘recoveries’) increases. Eventually, this leads to a plateauing of prices, and progressively, as random shocks to the larger supply population push up the ratio of sellers to buyers, prices begin to fall. That induces speculative selling pressure as price declines are projected forward exponentially,” they wrote in a recent letter to clients.

According to them, this leads to a situation when orders for sale overtop orders for purchase and, as a result, to an exponential price reduction.

A similar dynamic plays out with infectious diseases when the so-called immunity threshold is reached, “the point at which a sufficient portion of the population becomes immune such that there are no more secondary infections,” the analysts wrote.

Bitcoin still trades below $7,000, with the overall cryptocurrency market standing at $264 billion. According to Tom Lee, head of research at Fundstrat Global Advisors, it is useless to expect price surge until the tax filing deadline in US in mid-April.