In the last 24 hours, Bitcoin’s price has been ruled by the bears, dropping over 8% to $6,508.19 as of 12:00 p.m. ET after news broke yesterday that the US Securities and Exchange Commission is postponing their decision on a bitcoin ETF filed by investment firm VanEck and blockchain technology company SolidX.
The join venture of VanEck and SolidX came about to launch an ETF backed by actual bitcoins as opposed to futures. By offering the digital currencies in the form of an ETF, it would help attract potential investors who were initially reticent on investing in cryptocurrencies due to hacking and other security issues. The extra layer of federal regulation under the SEC would help alleviate these concerns.
The latest effort by VanEck represents the firm’s third attempt to obtain SEC approval for a bitcoin ETF. The SEC explained that the Securities Exchange Act provides for an extension of 45 days period from the date of publication if it finds it “appropriate to designate a longer period” in order to allow enough time to consider the proposed rule change.
According to the SEC, “the Commission, pursuant to Section 19(b)(2) of the Act 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.”
Bitcoin prices fell as the news broke with the leading cryptocurrency down 8.46% in the last 24 hours. In the last seven days, Bitcoin has fallen 14.5% after breaking through the $8,000 price mark near the end of July–a critical price level seen by bulls as one that would set the stage for a rally.
Nonetheless, some analysts view the decline as a retrace back to a consolidation price of $6,000 or below, which the digital currency breached on June 24.
“In the short terms, technical analysis is still on the bears’ side,” said analysts at FXPro, a London-based foreign exchange broker. “The benchmark currency [bitcoin]doesn’t have important levels of consolidation near current trading marks. It means that after a short pause the bitcoin could slide down to the nearest consolidation level close to $6,200 mark, and even lower to $5,800.”
After reaching a high of $20,000 last December, the price of Bitcoin has fallen unceremoniously. The rally past the $8,000 mark came as a result of a spate of news regarding interest from investment giant BlackRock, as well as the Bitcoin ETF from VanEck and SolidX.
The latest declines were also spurred by the SEC rejecting plans by Winklevoss Capital Management founders Cameron and Tyler Winklevoss to launch the Winklevoss Bitcoin Trust. The SEC rejected their application for the last year, but it was resubmitted in June, which included a proposed rule change. According to a release by the SEC, the agency said it did not agree with the Winklevoss’ premise that cryptocurrency markets are “uniquely resistant to manipulation.”
timeline of all pending #bitcoin ETFs compiled by @CumberlandSays pic.twitter.com/jg2tlWdDA8
— Bobby Cho (@robertjcho) August 8, 2018
“I do remain longer term bullish,” said Bill Baruch, president and founder at Blue Line Research. “Now I believe the SEC has until the end of September to confirm or deny moving forward with a bitcoin ETF. All things considered, you’re going to see something positive come from this.”
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