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Bitcoin transactions could more than halve this year, Juniper Research predicted, as a lack of regulation and links with illegal activity hinder the cryptocurrency's ability to go mainstream.

In a recent report, the U.K.-based research firm estimated the value of cryptocurrency transactions would decline to $30 billion in 2015 from over $71 billion last year. The bearish figures follow a rough start to the year for the controversial digital currency. Prices have been in freefall, trading below $250 throughout January compared with $1,000 at the same time last year, according to CoinDesk, a widely-watched price index. "The decline is attributable to the combined impact of exchange collapses, Bitcoin theft and regulatory concerns around cryptocurrency's role in funding dark web purchases," Juniper Research said. Read MoreEcuador becomes the first country to roll out its own digital cash

Need for regulated exchanges

Experts agree that the introduction of regulated exchanges could lead to price stabilization and greater acceptance in the retail market.

"We predict that volatility will stabilize as more high-quality exchanges become established and more users come online," said Adam Tepper, CEO of Australian bitcoin exchange Independent Reserve, in a note last week. The lack of regulation is a barrier to mainstream acceptance, he said. The launch last week of the first licensed exchange in the U.S. - the Coinbase bitcoin exchange - is a positive step for the currency and Tepper expects other exchanges to follow suit. "The high-profile Mt. Gox collapse in 2014 highlighted the need for better technology and security controls for bitcoin exchanges, much as the U.S. flash crash highlighted these issues for traditional securities markets," Tepper added. Japanese firm Mt. Gox was a leading bitcoin exchange last year before going bankrupt following the disappearance of 850,000 bitcoins.

As a result of an unregulated marketplace, bitcoin theft has thrived, Juniper Research said, referring to the recent theft of nearly 19,000 bitcoins from U.K exchange Bitstamp, the second largest dollar-bitcoin exchange.



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