Bitcoin Falls Below $6,000 as Nearly Every Cryptocurrency Declines, According to Bloomberg

Cryptocurrency prices continued to decline this month, with Bitcoin dropping below $6,000 for the first time since June. As of 3:07 p.m. in Hong Kong, Bitcoin fell by as much as 6.2 percent to reach $5,887. Many smaller digital tokens experienced even steeper declines, with some dropping as much as 13 percent. Overall, nearly all of the 100 largest cryptocurrencies recorded losses over the past 24 hours, leading to a reduction in the total market capitalization of virtual currencies to $192 billion, down from approximately $835 billion in January. This marks a significant reversal of the gains witnessed during the cryptocurrency surge at the end of 2017.

Samson Mow, the chief strategy officer at blockchain developer Blockstream Corp, commented on the situation, stating that most cryptocurrencies have been overvalued for an extended period. He noted that while it’s challenging to attribute the current market movements to any specific factor, this downward trend contrasts sharply with the previous year when there was a surge in investments driven by fear of missing out (FOMO). Now, he suggests, there is a sense of panic prompting investors to exit the market.

Earlier this month, hopes for a Bitcoin-backed exchange-traded fund had fueled a rally in cryptocurrencies. However, U.S. regulators have not approved several proposals for such products, leaving investors disappointed. Concurrently, concerns have grown that entrepreneurs who raised initial coin offerings (ICOs) in cryptocurrency are beginning to sell off assets, particularly Ether, a popular token on the Ethereum network.

Timothy Tam, CEO of CoinFi, indicated that the significant weakness in Ethereum is a key story in today’s market. He pointed out that while Bitcoin remained relatively stable compared to Ethereum, it is still notably weak against the U.S. dollar.

At its peak, Ether made up 32 percent of cryptocurrency market capitalization, nearly equivalent to Bitcoin’s 39 percent. Currently, Ether accounts for about 14 percent, while Bitcoin represents 54 percent, having experienced smaller declines than many of its counterparts. Tam remarked that ICOs holding substantial amounts of cryptocurrency are facing considerable hardship as their assets depreciate in value.

This month, Ether has plummeted by 39 percent, while Bitcoin has fallen approximately 22 percent. Despite recent global market upheaval, particularly related to Turkey’s currency crisis, experts believe it is unlikely to have a significant impact on cryptocurrencies. James Quinn, head of markets at Kenetic, noted that historically, correlations between cryptocurrencies and other asset classes have been low, which has attracted interest from investors seeking diversification.

Nonetheless, those hoping for Bitcoin to act as a safe haven during global market turmoil may be disappointed, as its decline this month has been nearly as severe as the 25 percent drop in the Turkish lira.