Cryptocurrencies falling again on Thursday morning, although the sell-off is not as bad as the past two days. Ethereum is back below $1,000.
The cryptocurrency market’s wild week is continuing on Thursday, with many major digital assets falling after a brief respite overnight.
Cryptocurrency markets tanked on Tuesday and Wednesday, before a slight pickup during late US and Asian trading on Wednesday. But the rollercoaster price action doesn’t appear to be over, with major cryptocurrencies falling again during morning trade in London.
The most notable drop is Ethereum, which has fallen back below the psychologically significant level of $1,000. The cryptocurrency is down over 4% at 8.20 a.m. GMT (3.20 a.m. ET). Bitcoin is also falling, down almost 3% against the dollar at the same time.
There are multiple theories as to what is causing this week’s slump in the cryptocurrency markets, ranging from Chinese Lunar New Year to bitcoin futures crashing the market. Read a full roundup of the theories here.
Hussein Sayed, chief market strategist at FXTM, said in an email on Thursday morning: “Finding a fair value in cryptocurrencies is an impossible mission, as animal spirits will remain the key driver.
“Most people who were buying bitcoin and other cryptocurrencies most recently, are not using them for transactions, but holding them in the expectation of profiting from the endless rising price. Whether the animal spirits have already released their grip, remains to be seen and this cannot be ascertained from a two-day slump.
“Brick and mortar stores have been very slow to accept cryptocurrencies as a method of payment. This is what worries me most. If we don’t see growth in their acceptance as payment method, then it is not serving its true purpose.”