It was once the future of money but this week has seen Bitcoin lurch 20% lower, with other crypto-currencies suffering even more serious falls.

On Tech Tent we ask whether the dream of a decentralised currency that would overturn the established financial system is over – and whether the regulators need to step in to protect naive investors.

This week’s turmoil seems to have been the result of the feuding which has seen Bitcoin Cash – itself a variant of the original Bitcoin – split into two currencies, with both of them plunging in value and the contagion spreading across the wider crypto-currency market.

So is this just another dip in a volatile market or does this week tell us something more profound about the viability of crypto-currencies?

Merryn Somerset Webb, editor of the finance magazine Money Week and a long-term sceptic about Bitcoin, tells us she feels vindicated:

“The things the old fuddy-duddies have been saying about crypto-currencies for the last couple of years turn out to be mainly true – that they’re in the main vehicles for speculation, that the currencies in themselves have very little value. In most cases their value is around zero and that’s where they’re getting to gradually.”

Bitcoin soared to nearly $20,000 (£15,600) a year ago, before settling between $6,000 and $7,000 for much of this year, and then lurching down towards $4,000 this week. The true believers insist that it will bounce back as it has before.

Iqbal Gandham, of the crypto-currency trading firm eToro UK, gives us the startling prediction that Bitcoin will be worth anywhere between $500,000 and $1m over the next four or five years – although he adds the proviso that if it does not get to that level then it will have failed as a currency.

eToro has spent heavily on marketing, buying adverts on the London Underground and sponsoring Premier League football clubs.

As a result, it appears likely that it has enticed inexperienced investors into this market at a dangerous time, and I put it to Iqbal Gandham that many of them must be sitting on big losses.

“Not really,” he said,

He said all investments had seen prices tumbling in recent weeks, with Apple and Amazon seeing very sharp falls in their shares.

Time for regulation?

They, of course, are real businesses with huge assets whose shares trade in tightly regulated markets – Bitcoin could hardly be more different.

In the UK, the Treasury, Bank of England and the Financial Conduct Authority have been discussing whether there needs to be tighter regulation for the last couple of years.

When I caught up with Christopher Woolard, executive director of strategy for the FCA, he was keen to issue a warning: “People will have to be aware that if they’re thinking of investing in this space they could lose all their money.”

He was less clear about whether regulation was coming: “We do need to think about how suitable some of these investments – as they’re perhaps being presented – really are for retail investors, ordinary customers.”

Iqbal Gandham says his firm would welcome regulation although it is hard to see how the FCA would permit the marketing to football fans and tube travellers of what is essentially a gambling service.

Merryn Somerset Webb is not completely dismissive about crypto-currencies – she says their underlying technology has “huge potential to transform payments system and help the unbanked”.

But she insists that doesn’t tell you anything about the value of the currencies.

She believes that we are in a period when investors are taking a long hard look at what is behind these crypto-assets – and are concluding they may be worthless.