Crypto market in ‘panic mode’ as billions lost in sell-off

THE price of Bitcoin fell below $6,000 (£4,700) yesterday as a new sell-off wiped billions off the value of a number of cryptocurrencies.

The falls came after the US Securities and Exchange Commission delayed a ruling on whether it would allow a Bitcoin Exchange-traded Fund to go ahead.

Bitcoin, which was changing hands for $17,000 at the start of the year, dropped 6pc in 24 hours to as low as $5,900, leaving it near its lowest point of the year, which it hit on June 18 at $5,785 (£4,524).

Meanwhile, rival digital currency Ethereum fell 16pc and Ripple dropped 14pc, according to Coinmarketcap. In the past five days, all cryptocurrencies have seen falls totalling about $60bn.

“The crypto market seems to have hit panic mode, with prices falling significantly across the board,” said Matthew Newton, an analyst at cryptocurrency trader etoro. “Bitcoin is still rangebound for now between $5,700 to $8,000 in line with how it has traded over the past few months.”

Cryptocurrencies are digital coins that operate on an online digital ledger, which records all transactions. While the price of cryptocurrencies reached record highs during a sudden bubble in December, they have gradually fallen in value this year, closing in on the levels they were at in early 2017.

Cryptocurrency enthusiasts say that blockchain technology, the digital ledger that Bitcoin is built on, could let people trade and invest in digital currencies or use them to pay for utilities. However, the current difficulty in paying for goods with digital currency means this could be some way off.

Regulators are also taking their time on the adoption of the new digital currencies. In the UK, a Crypto Assets Taskforce has been set up which includes members from the Treasury, the Financial Conduct Authority and the Bank of England. The group aims to explore “the potential benefits and challenges of the application of distributed ledger technology in financial services, and assessing what, if any, regulation is required in response”.

Data security company Ciphertrace found that $761m (£577m) had been laundered since the start of the year from cryptocurrency exchanges.