Quite a few theories emerge each time the worth of Bitcoin takes a sudden and steep dive. The same old suspects embrace authorities laws, the opportunity of exchanges manipulating costs, Bitcoin (BTC) whales manipulating costs, overleveraged merchants and a few conspiracies involving Tether (USDT).
SEC kicks Bitcoin ETF can down the street
Between Aug. 15 and Aug. 18, Bitcoin’s worth skilled a big 12% decline. This prevalence adopted a well-known sample, prompting quite a lot of causes put forth by analysts and consultants.
Sadly, as a result of decentralized nature of cryptocurrencies and the dearth of transparency amongst exchanges, verifying whether or not a selected entity influenced the worth motion stays a difficult process.
On Aug. 11, Ceni, a co-founder of Ceni Capital, made a prediction that turned out to be partially correct. Ceni predicted a Bitcoin worth decrease than $29,000, anticipating the USA Securities and Change Fee (SEC) would postpone its resolution relating to the ARK Bitcoin exchange-traded fund (ETF).
SEC Delays Determination on Ark Make investments’s Spot Bitcoin ETF Software, Calls For Public Enter-8 week delay for BlackRock to control the market. 29k ought to break quickly low cost stats for holders and institutional traders. pic.twitter.com/pcBhOho0Ax
— CENI⬛️(,) (@ceni0718) August 11, 2023
Nevertheless, it’s vital to notice that the prediction didn’t specify the timing of this occasion or the precise help degree. Consequently, the statistical basis for this speculation turns into much less sure.
Nonetheless, Ceni has pointed to BlackRock as a possible instigator of Bitcoin’s crash, a declare that warrants thorough investigation.
Spot Bitcoin ETF just isn’t a short-term deal for BlackRock
The concept BlackRock would possibly profit from a decrease Bitcoin worth earlier than launching a spot Bitcoin ETF just isn’t as easy as it might appear. Whereas the idea of a decrease Bitcoin worth resulting in elevated profitability upon ETF launch is perhaps intuitive, there are a number of the reason why this won’t align with BlackRock’s broader pursuits.
Before everything, BlackRock has constructed a popularity as a revered monetary establishment based mostly on its dedication to market stability and investor confidence. A sudden and substantial drop in Bitcoin’s worth might undermine the general credibility of the cryptocurrency market, one thing BlackRock would purpose to keep away from. The precedence of sustaining the market’s legitimacy would possibly outweigh any fast positive factors ensuing from a low Bitcoin worth.
Secondly, acquiring regulatory approval performs a crucial function in launching any monetary product, particularly inside the cryptocurrency area. The SEC meticulously assesses the potential for market manipulation and safeguards for investor safety. Participating in actions that may very well be construed as worth manipulation might jeopardize BlackRock’s probabilities of securing the mandatory regulatory approvals for its ETF providing.
Lastly, instilling investor confidence is of paramount significance when introducing any funding product, notably a novel one like a Bitcoin ETF. A pointy Bitcoin worth drop might erode belief amongst traders, not solely within the asset class itself but additionally within the ETF.
Subsequently, BlackRock’s curiosity seemingly lies in launching the ETF throughout a interval of constructive sentiment, the place traders really feel assured in regards to the potential for future positive factors.
If not BlackRock, who’s guilty for the BTC worth drop?
The subsequent chance typically thought-about when making an attempt to clarify a drop in Bitcoin’s worth is the concept that the federal government will regulate the cryptocurrency sector. The motivation to control could be pushed by a need to cut back demand to make the U.S. greenback stronger.
Often, these theories counsel that steps could be taken to manage stablecoins and exchanges which are situated exterior the USA. Market analyst Joe Kerr talked about this on X (previously Twitter):
Tinfoil hat time:
Promote Authorities Bitcoin to Coinbase to suppress worth.
Get Binance to defend BNB by promoting their Bitcoin.
Drain Binance’s low cost Bitcoin and promote it to coinbase.
Binance goes broke & Coinbase has nearly all of trade Bitcoin (SSA req achieved).
Approve…
— Joe Kerr⚡ (@Boomstick44) August 18, 2023
Whereas this principle is fascinating, there are challenges and components that make it appear much less seemingly. First, it’s attainable to considerably monitor authorities wallets, however analysts ought to keep in mind that governments normally have solely a small a part of all of the Bitcoin, so their affect on the entire market is proscribed.
Associated: Bitcoin speculators are underwater on 88% of their BTC luggage — Analysis
Betting in opposition to the BNB worth and different nonsense
Subsequent, the thought of betting in opposition to the worth of BNB (BNB) won’t be so simple as it sounds. To wager in opposition to BNB, merchants would wish to borrow it, however they’ll’t try this on platforms that comply with laws.
Furthermore, by checking Binance’s transparency web page, an individual can see in real-time whether or not the trade’s Bitcoin wallets are getting smaller in comparison with different exchanges.
This might counsel uncommon issues just like the improper use of buyer cash or monetary issues. Precise knowledge from these observations is extra vital than simply guessing, because it provides perception into how nicely the trade is doing.
In the end, most of those theories make assumptions and simplify issues, ignoring how complicated cryptocurrency markets, exchanges and laws are.
The true outcomes may very well be very completely different from what’s prompt, so whereas the general public would possibly by no means know the reality for certain, an individual can at the very least dismiss such theories as BlackRock crashing Bitcoin earlier than a spot Bitcoin ETF approval.
This text is for basic data functions and isn’t meant to be and shouldn’t be taken as authorized or funding recommendation. The views, ideas, and opinions expressed listed below are the creator’s alone and don’t essentially replicate or signify the views and opinions of Cointelegraph.
