The cryptocurrency market is in “panic mode” as the values of bitcoin and other digital coins plummet following a series of mass sell-offs.
Bitcoin’s value fell by 6% to a six-week low of $5,880 (£4,620) on Tuesday, Reuters reports, with the virtual currency’s price down by a total of 57% since the beginning of the year.
Ethereum, bitcoin’s closest rival in market value, also suffered significant losses earlier this week, as its price “plunged to a more than one-year low” of $250 (£196) per coin, the news site adds. However, figures posted by CoinMarketCap indicate that Ethereum’s value has since risen to around $280 (£220).
The exact causes of the sell-offs remain unclear, but analysts believe companies may be capitalising on funds raised through the cryptocurrency boom at the end of last year, says The Independent.
Matthew Newton, an analyst at online digital coin exchange eToro, says that “the crypto market seems to have hit panic mode”.
“As we can see in the case of Ethereum, investors seem to be increasing liquidations of their ICO (initial coin offering) holdings, with significant drops in price and increased volumes,” he said.
The collapse of the Turkish lira against the US dollar last week may also have spooked emerging-market currencies, triggering sell-offs to counter the deficit, Business Insider claims.
Speaking to the news site, Market.com chief analyst Neil Wilson said the continuing decline in cryptocurrency values “puts paid to the notion of cryptos as a safe haven”.
Although there have been cases of people making millions through cryptocurrencies, market experts say the “volatility” of digital coins means investors should not put their life savings into the technology, adds The Independent.