Bitcoin Tumbles Below $6,000 Support As Xapo President Fears Altcoin "Extinction Event"

Update: Bloomberg reports that the total market capitalization of virtual currencies dropped to $193 billion.

“The big story in the market today is the huge weakness in Ethereum,” Timothy Tam, chief executive officer of CoinFi, a cryptocurrency data analysis company, said in a phone interview. “Bitcoin has held up relatively well versus Ethereum. It’s still quite weak versus the U.S. dollar.”

At the height of Ether’s rally last year, the digital coin comprised 32 percent of cryptocurrency market capitalization, coming within striking distance of Bitcoin’s 39 percent. Ether now makes up about 14 percent, while Bitcoin accounts for 54 percent after falling less quickly than its smaller peers, according to Coinmarketcap.com.

“ICOs that have raised a lot of money are really feeling a lot of pain” as their crypto holdings lose value, Tam said.

Ether has tumbled about 40 percent this month, while Bitcoin has dropped about 26 percent.

“Most cryptocurrencies have been overvalued for a very long time,” said Samson Mow, chief strategy officer at blockchain developer Blockstream Corp.

“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.”

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Authored by William Suberg via CoinTelegraph.com,

Bitcoin (BTC) prices fell back below $6,000 overnight for the first time since the end of June Tuesday, August 14, as the cryptocurrency community remains resilient, but has just faded back below that level after a morning bounce.

image courtesy of CoinTelegraph

Data from Cointelegraph’s price tracker and Coin360 depict a gloomy environment for traders Tuesday, with all major assets in the red as Bitcoin falls almost 5 percent in 24 hours. Top ten coins are seeing as much as 17 percent losses on the day, with top fifteen coins are down as much 20 percent over the same period.

Market visualization from Coin360

At press time, BTC/USD traded just above the significant barrier around $6,100, capping weekly losses of 14 percent.

Bitcoin’s 7-day  price chart.

The pair has come full circle since mid-July, when a sudden bull market took over to bring prices to a peak around $8,450 across major exchanges.

Progress then reversed as August began, meaning investors have seen monthly gains to date of just 3 percent.

The figures nonetheless set Bitcoin apart from altcoins, and specifically Ethereum (ETH), losses of which extend to 16 percent on the day and almost 35 percent on the week.

Over the past 30 days, ETH/USD has slipped almost 40 percent.

Ethereum’s 30-day price chart.

On social media, commentators were eyeing the knock-on effect Bitcoin prices volatility traditionally has on altcoin markets, producing higher moves both up and down in those assets.

As Bitcoin dominance –– or the percentage of total crypto market cap that is Bitcoin’s –– hits highs not seen since December 2017, Twitter analysts are similarly calling for a repeat of the altcoin bull market which began in the latter half of that month.

Higher Bitcoin market dominance, they claim, is apt to produce a U-turn in altcoins’ downtrend.

Since Friday's close, Ether is down 25%, Bitcoin down just 3%...

Others were altogether less sure. In comments Monday, Xapo president Ted Rogers considered current conditions conducive to producing an “extinction-level event” for cryptocurrencies en masse.

“90%+ of CoinMarketCap list will disappear eventually - might as well happen now,” he warnedMonday.

Elsewhere, other major assets have shed 10 to 15 percent of their value, these including Ripple (XRP)Litecoin (LTC),  EOS (EOS), and Cardano (ADA).

But as Bloomberg notes, there remains some hope, as Cboe Global Markets wants to be the first to list a Bitcoin exchange-traded fund, though there’s still a lot of work needed to win approval from the U.S. Securities and Exchange Commission.

“As we chip away at their issues to make them less concerned, at some point they’ll be comfortable with an ETF,” Chris Concannon, the Chicago-based exchange operator’s president and chief operating officer, said in an interview.

The SEC has been wary of bringing crypto to the masses with an ETF despite speculation one would be endorsed as early as this month. It postponed a decision last week on a proposal that would allow the fund from VanEck Associates Corp. and SolidX Partners Inc. to list on Cboe. The SEC earlier rejected an ETF proposal by Tyler and Cameron Winklevoss, who run the Gemini Trust Co. cryptocurrency exchange. The regulator is concerned about manipulation in the mostly unregulated digital currency markets.

“The SEC is likely to delay until February of 2019 and the chances of a Bitcoin ETF approval in 2018 have always been low,” Hany Rashwan, chief executive officer of crypto startup Amun Technologies Ltd., said last week.