It should have been an ideal year for digital currencies to prove their value as alternatives to traditional money: Government-backed currencies were dragged down by ongoing Brexit concerns, and there were growing trade tensions between the U.S., China and European Union.

Yet, bitcoin and others have failed to stage a comeback, which one researcher cites as an indicator there may be more bad news ahead for cryptocurrencies.

"If Bitcoin cannot make gains in such favourable circumstances, then it is unlikely to prosper as and when these issues are resolved," U.K.-based Juniper researcher Windsor Holden said in a new study published Tuesday. "We feel that the industry is on the brink of an implosion."

The world's largest cryptocurrency is down 52 percent since the beginning of this year and more than 65 percent since nearing the $20,000 mark in December, according to data from CoinDesk. Regulatory crackdowns and news of hacks on global exchanges contributed to the decline.