Investing.com – Ethereum plunged 20%, while Ripple and Litecoin were also down more than 13% on Tuesday on reports that investors who bought Ethereum to participate in initial coin offerings (ICOs) are cashing out to cover expenses.
Ethereum tumbled 20.7% to $266.4 at 12:20AM ET (04:20 GMT) on the Bitifinex exchange.
(Bitcoin) was down 6.4% to $5,971.0 on the Bitifinex exchange.
Ripple fell 14.0% to $0.26296 in the last 24 hours on the Poloniex exchange, while Litecoin plunged 13.1% to $52.296.
ICOs usins the Ethereum blockchain were one of the major catalysts for pushing Ethereum above the $1,000 mark earlier this year, Bloomberg reported on Monday, noting that investors who bought the digital coin to participate in those ICOs are now cashing out to cover expenses amid concerns that cryptocurrency bear market would continue.
“These startups are raising a lot of funds but they don’t have treasury management or enough cash management experience, so they’re selling too early and causing a lot of pressure in the market,” said Biswa Das from cryptocurrency quantitative hedge fund BloomWater Capital. “It was fine last year but right now the the market is so fragile that it causes a lot of pressure.”
Ethereum is currently trading at an 9-month price low, hitting below the $300 price point last seen in early November and is now down about 60% this year, but investors are probably not done selling the digital coin, according to Das. “The pain is probably not over,” he said.
Cryptocurrency prices were also under pressure last week on reports that the U.S. Securities and Exchanges (SEC) has delayed the decision on whether to allow the fund from VanEck Associates Corp and Solid Partners Inc to list by the end of September. An initial deadline was due to expire this week.