Bitcoin, ethereum and other major cryptocurrencies have plummeted in price, with analysts warning that the market has hit “panic mode”.
Ethereum experienced the biggest drop in value of all the major digital currencies, falling by nearly 20 per cent over the last 24 hours to hit its lowest price in almost a year.
Massive trading volumes suggest a mass sell-off, with ethereum trading at $262 at the time of writing. The price of bitcoin has fallen to $6,043, down 7 per cent since this time yesterday.
Cryptocurrency analysts have linked the latest market movements to the liquidation of funds raised through ICOs (initial coin offerings), meaning companies may be selling the ethereum raised through the popular fundraising mechanism.
“The crypto market seems to have hit panic mode, with prices falling significantly across the board. As we can see in the case of ethereum, investors seem to be increasing liquidations of their ICO holdings, with significant drops in price and increased volumes,” said Matthew Newton, an analyst at the online trading platform eToro.
“This has had a knock-on effect on the rest of the [cryptocurrency] market, with bitcoin also momentarily dropping below $6,000 late last night. With prices hanging in the balance, emotions will be running high among traders. But keeping things in perspective, bitcoin is still range-bound for now between $5,700 to $8,000 in line with how it has traded over the past few months.”
Cryptocurrency investors have been sharing their tales of woe on community forums, with some revealing the extent of their personal losses.
“I got into crypto’s at the end of January,” one member of the cryptocurrency forum on Reddit. “Put around 25,000 USD in in total, spread out pretty well I thought.”
They continued: “I was never really worried during that past dips as I had a lot of faith in the future of crypto’s and the technology… But the dips kept coming… My portfolio of 25k is now barely worth 5k, and not even worth selling. At this point I’d much rather consider it all lost.”
Others in the sub-Reddit said they would make the most of the price crash by “buying the dip”, despite the downward trend across markets in 2018.
“I honestly didn’t believe the alt market… would hit these levels,” one user wrote. “Well, I can only think of one thing to do. Time to double down. I’m either winning big or going down with the ship.”
Experts warn that the volatility of cryptocurrencies mean people should not invest more than they can afford to lose.