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Cryptocurrencies hit a collective value of close to $800 billion in December and January, when prices jumped.

Since then a sharp selloff has left them with a capitalisation of around $260 billion, according to Coinmarketcap.com, $115 billion of that being in the biggest and best-known cryptocurrency, bitcoin.

The combined figure was unlikely to climb back beyond a range of $660 billion to $780 billion, the British bank said in an analysis, with any long-term demand for cryptocurrencies coming from “low-trust” sectors of the global economy.

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Barclays based its findings on a model that compared crypto-hysteria to “the spread of an infectious disease” through a population of investors.

The bank divided them into three groups: “Infected individuals, susceptible individuals who are vulnerable but not yet infected and those who are immune,” said Marvin Barth, head of global FX strategy.

“Like infection, transmission is by word-of-mouth, via blogs, news reports and personal anecdotes,” he told journalists.

The bank said that former cryptocurrency holders were developing “immunity to further investment.”

Critics say digital currencies are little more than a giant Ponzi scheme and regulators have warned investors that all their money is at risk. With prices dropping after financial authorities promised a crackdown, several banks and analysts have already called the market a bubble that is now deflating.

Supporters say cryptocurrencies and the technology behind them have the potential to do away with traditional fiat currencies and transform how we store money and pay for goods.

Barclays said that it had reached its market capitalisation estimates using generous assumptions of money demand for transactions and wealth storage in “low-trust sectors.”

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