Bitcoin sinks as cryptocurrencies take a sudden lurch lower

Cryptocurrencies dropped on Thursday as bitcoin gave up the US$4 000 level it’s hovered around since the start of the year.

The largest digital currency slumped as much as 6.2% in the European morning, erasing an earlier small gain to trade at $3 785.17 at 9.28am in London. The Bloomberg Galaxy Crypto Index, a gauge of the largest cryptocurrencies, fell 7.7% as bitcoin’s rival tokens, including ether, litecoin and XRP, also retreated.

Timothy Tam, co-founder and CEO of CoinFi, a cryptocurrency research firm in Hong Kong, said while there wasn’t an immediate reason for the abrupt selloff, he did notice a large transfer of about 40 000 ether into an exchange an hour before the drop.

“Usually transfer of ethereum onto an exchange indicates an intent to sell, and if there is a selloff on one exchange it compounds like dominoes to another because arbitragers will sell immediately on the other exchanges as well,” he said in a message.

The cryptocurrency industry took another blow earlier this week after ethereum classic, an offshoot of the second largest digital currency, came under a so-called 51% attack, in which some computers supporting a network falsify transactions. Coinbase, one of the world’s largest crypto exchanges, said on Monday it had found “deep reorganisations” of the ethereum classic blockchain. Some $1.1-million in the coins may have been spent twice.

Cryptocurrency prices plummeted in 2018 amid ongoing security concerns and regulatory scrutiny. The industry has erased more than $700-billion in value from an all-time peak of over $835-billion last January, according to data compiled by  — Reported by Eric Lam, (c) 2019 Bloomberg LP