Cryptocurrencies tumble as 'panic' motivated sell-off continues

Bitcoin’s value dipped below $6,000 on Tuesday while other cryptocurrencies such as Ethereum continued to sink amid a continued sell-off in digital currencies.

Cryptocurrency analysts have linked the latest market movements to the liquidation of funds raised through initial coin offerings (ICOs), with companies potentially selling off the Ethereum raised through the popular fundraising mechanism.

Samson Mow, chief strategy officer at blockchain developer Blockstream Corp, said: "Most cryptocurrencies have been overvalued for a very long time. It’s hard to pin this move on any particular factor, but it feels like the opposite of last year when money piled in as people felt FOMO. Now it’s piling out as they sense panic."

92 out of the top 100 cryptocurrencies on Tuesday had suffered double-digit losses over the last 24 hours with Bitcoin, the undoubted champion of the crypto phenomenon, down over two thirds from its December high of $20,000.

Cryptocurrencies had rallied over July amid hopes of a Bitcoin-backed exchange traded fund but US regulators have not yet signed off on any of the various iterations of the idea.

James Quinn, head of markets at blockchain firm Kenetic, told Bloomberg that Turkey’s currency crisis could be having an effect on the digital currencies despite the perception of currencies such as bitcoin being a haven from such market fluctuations.

"Correlations historically have been extremely low between cryptocurrencies and other asset classes. Which is one of the reasons why there is interest in this space and why people want to make an allocation in this space," he said in a phone interview from Hong Kong.