Ethereum, the world’s second-largest cryptocurrency by market capitalisation, suffered a brutal selloff on Tuesday, tumbling 10.06% to trade around £1,820. The sharp decline wiped out weeks of gains and sent shockwaves through the digital asset market, with total crypto market capitalisation shedding more than £100bn in a single day.
The selloff was broad-based, with Bitcoin falling 4.5% to £26,100 and smaller altcoins like Solana and Cardano losing between 8% and 12%. Analysts attributed the move to a combination of profit-taking after a sustained rally and renewed regulatory jitters following reports that US authorities are intensifying scrutiny of crypto exchanges.
For UK investors, the drop is a stark reminder of the volatility inherent in digital assets. Many retail traders and pension holders who have allocated a small portion of their portfolios to crypto through exchange-traded products or direct holdings have seen the value of those positions erode rapidly. The Financial Conduct Authority has repeatedly warned that crypto investments carry a high risk of loss and are not covered by the Financial Services Compensation Scheme.
“This is a classic risk-off move,” said Marcus Reed, a digital assets analyst at London-based consultancy CryptoSight. “After a strong run, markets were looking for an excuse to take profits, and the regulatory headlines provided that trigger. UK holders should brace for further swings as the market digests these developments.”
The selloff also weighed on shares of companies with significant crypto exposure. Coinbase Global, the US-listed exchange, fell 6% in pre-market trading, while UK-listed blockchain investment trust Ruffer saw its net asset value dip. The broader FTSE 100 was largely unaffected, though sentiment in the technology sector remained cautious.
Source: CoinMarketCap, Reuters