Quite a few theories emerge each time the worth of Bitcoin takes a sudden and steep dive. The standard 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 incidence adopted a well-recognized sample, prompting a wide range 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 particular entity influenced the worth motion stays a difficult job.
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 america Securities and Trade Fee (SEC) would postpone its resolution relating to the ARK Bitcoin exchange-traded fund (ETF).
SEC Delays Choice on Ark Make investments’s Spot Bitcoin ETF Software, Calls For Public Enter-8 week delay for BlackRock to govern the market. 29k ought to break quickly low cost stats for holders and institutional buyers. pic.twitter.com/pcBhOho0Ax
— CENI⬛️(,) (@ceni0718) August 11, 2023
Nonetheless, it’s necessary to notice that the prediction didn’t specify the timing of this occasion or the precise assist stage. In consequence, 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 will not be a short-term deal for BlackRock
The concept that BlackRock would possibly profit from a decrease Bitcoin worth earlier than launching a spot Bitcoin ETF will not be as easy as it might appear. Whereas the idea of a decrease Bitcoin worth resulting in elevated profitability upon ETF launch may be intuitive, there are a number of explanation why this may not align with BlackRock’s broader pursuits.
At the beginning, BlackRock has constructed a status 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 rapid 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 required 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 buyers, not solely within the asset class itself but in addition within the ETF.
Due to this fact, BlackRock’s curiosity seemingly lies in launching the ETF throughout a interval of optimistic sentiment, the place buyers really feel assured in regards to the potential for future positive factors.
If not BlackRock, who’s in charge for the BTC worth drop?
The following chance usually thought of when making an attempt to clarify a drop in Bitcoin’s worth is the concept the federal government will regulate the cryptocurrency sector. The motivation to control can be pushed by a want to scale back demand to make the U.S. greenback stronger.
Normally, these theories counsel that steps can be taken to manage stablecoins and exchanges which can be positioned exterior america. 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 the vast majority of trade Bitcoin (SSA req achieved).
— Joe Kerr⚡ (@Boomstick44) August 18, 2023
Whereas this idea is attention-grabbing, there are challenges and elements that make it appear much less seemingly. First, it’s potential to considerably observe authorities wallets, however analysts ought to do not forget that governments often have solely a small a part of all of the Bitcoin, so their affect on the entire market is restricted.
Betting in opposition to the BNB worth and different nonsense
Subsequent, the thought of betting in opposition to the worth of BNB (BNB) may not be so simple as it sounds. To wager in opposition to BNB, merchants would want to borrow it, however they’ll’t do this on platforms that observe 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 necessary than simply guessing, because it offers perception into how effectively the trade is doing.
Finally, most of those theories make assumptions and simplify issues, ignoring how advanced cryptocurrency markets, exchanges and laws are.
The true outcomes may very well be very completely different from what’s advised, so whereas the general public would possibly by no means know the reality for positive, an individual can not less than dismiss such theories as BlackRock crashing Bitcoin earlier than a spot Bitcoin ETF approval.
This text is for normal 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 here are the writer’s alone and don’t essentially mirror or characterize the views and opinions of Cointelegraph.