LONDON – Cryptocurrencies are in the red on Tuesday, with bitcoin leading the market lower.
The value of the entire cryptocurrency market has fallen by around 10% over the last 24 hours, according to CoinMarketCap.com, falling from $218 billion to $193 billion.
Bitcoin, the largest cryptocurrency by value, dropped below the psychologically significant level of $6,000 early in the session but has since recovered.Bitcoin is down 3.4% to $6,041.20 at 10.55 a.m. BST (5.55 a.m. ET). Other major cryptocurrencies are suffering similar drops at the same time:
The entire cryptocurrency market has been under pressure since late June when the US Securities and Exchange Commission delayed a decision on whether to approve a bitcoin ETF, a move that bitcoin bulls believe would have greatly increased the size of the market.
The current sell-off began on Monday, with ethereum falling to an 11-month low on the day.That slump comes as startups that raised funding in ethereum through so-called initial coin offerings cash out their holdings into traditional fiat money they can spend on development.
Hussein Sayed, the chief market strategist at FXTM, said in an email on Tuesday morning: “Cryptocurrency bulls also suffered a steep selloff yesterday with bitcoin falling below $6,000 for the first time since late June.
“The blame for this falls on the SEC as the U.S. regulator delayed a decision to create the first Bitcoin ETF. If an ETF doesn’t see the light in the coming weeks expect to see a further selloff, as it suggests regulators will continue to fight against bringing cryptocurrencies into the mainstream. A break below $5,770 will intensify selling pressure as it’s the only major support still standing.”
The slump comes as emerging market currencies are selling off, spooked by last week’s collapse of the lira against the dollar. Neil Wilson, the chief market analyst at Markets.com, said in an email that this coincidence “puts paid to the notion of cryptos as a safe haven play.”
“Ultimately USD and US Treasury notes are the only real safe harbour,” Wilson said.