It was another rough day for the stock market, and bitcoin (BTC) and other major cryptocurrencies suffered similarly.

Bitcoin, at $6,292, was down nearly 4.5 percent in Thursday afternoon trading. Ether (ETH), eos (EOS), bitcoin cash (BCH) and ripple (XRP) were off more than 10 percent. Litecoin (LTC) was down by nearly that much.

The drop dovetailed with an equities selloff that was the largest since February. The Dow Jones Industrial Average followed an 800-point drop on Wednesday by shedding an additional 546 points, or about 2 percent.

Will this current drop be enough to force bitcoin below $6,000?

The massive declines came amidst growing concerns about rising borrowing rates, inflation, tariffs and the escalating trade war with China, although a report that prices rose less than expected in September and news that President Trump could be meeting with Chinese President Xi Jinping briefly rallied markets.

Crypto’s tumble followed by two days cautionary remarks by the International Monetary Fund in its annual World Economic Outlook that increased use of digital currencies could create economic “vulnerabilities.” The report said the “continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.”

Some crypto observers and analysts said investors were wary of what research firm Oanda analyst Craig Erlam referred to as “exotic instruments” in a MarketWatch article.  

Specifically, bitcoin is not “displaying the qualities one would expect of gold 2.0, as it has been touted as by some cryptocurrency enthusiasts,” Erlam wrote.

“This truly is a widespread selloff and anything perceived as a risky asset has been in the firing line,” he added. “What will be interesting is whether this will be enough to force bitcoin below $6,000, which has proven to be something of a floor for the crypto on numerous occasions this year.”

In a tweet, Peter Schiff, CEO of Euro Pacific Capital and an advocate of gold investing, took the opportunity to highlight bitcoin’s volatility.

“Actual #gold is up 2.5% today and is trading like a safe haven,” Schiff wrote. “#Bitcoin, digital fool’s gold, is down 4.5 [percent] today and is trading like a risk asset. If you own bitcoin because you think its a store of value you are mistaken.  You should sell your bitcoin and buy gold!”

James Rubin
James Rubin has covered a range of business topics for such publications as the Economist Intelligence Unit, Forbes Insights and Adweek. His papers have been presented at World Economic Forum events. He was an associate editor at TheStreet and is the author of the "Urban Cyclist's Survival Guide."