On Wednesday crypto-currency markets reached their lowest levels this year, plummeting on the back of a US Securities and Exchange Commission ruling on a planned Bitcoin exchange traded fund (ETF).
Bitcoin dominated the drop-off with a slide of more than 7.5% to $6,500. The market was already bearish, but Bitcoin losing $600 in a 12-hour period accelerated things for all other crypto-currencies. On Wednesday total market capitalization had fallen to its lowest level in 2018, which is about $230 billion as more “fear, uncertainty and doubt” grips traders and holders.
The current crypto purge was triggered by Tuesday’s SEC decision to delay the approval of the planned Bitcoin ETF, that asset manager Van Eck Securities Corp and blockchain company SolidX Partners Inc say could be traded as easily as a stock. The Chicago Board Options Exchange already runs Bitcoin futures, but also had a highly anticipated Bitcoin exchange fund in the pipeline.
The official announcement was expected by a number of industry observers, who also predicted the proceeding market dump. CNBC’s crypto guru, Ran NeuNer, tweeted “As expected the SEC has exercised their right to an extension on the Van Eck ETF…” with others adding that the chances of an SEC approved crypto ETF in 2018 were extremely low.
The SEC has also delayed its decision on another planned trading initiative, the BZX fund, to the end of September, stating; “Accordingly, the Commission … designates September 30, 2018, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change.”
The Van Eck fund will be due for review once again this year but that is not expected to happen until early next year. The SEC has no reason to rush into things and has already denied another ETF application by the Winklevoss brothers last month. Following that announcement Bitcoin took a similar dive and dropped more than $400 in a few hours.
The Bitcoin bulls, however, are unperturbed with some, such as CNBC’s Brian Kelly stating: “We’ve had this big run-up, we’ve had a little bit of a sell-off today. If you are selling today after this decision, it’s the wrong way to do crypto investing.”
Others, including BitMEX exchange co-founder Arthur Hayes, still maintain that Bitcoin could reach $50,000 by the end of the year.
At the moment it is languishing around $6,500, which is down 67.5% from its high of $20,000 at the end of 2017. On the plus side Bitcoin is still up 87% from its price this time last year of $3,480. To say that crypto markets are a rollercoaster is certainly an understatement.
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