Yesterday, the price of bitcoin jumped by more than $400. There was no major news that supported the jump. After peaking at $6780, the price started declining. The decline was extended after a blow from the Securities and Exchange Commission (SEC), which rejected nine ETF proposals. The ETFs were submitted by firms like ProShares, Direxion and GraniteShares.
This was significant for the cryptocurrency industry, which could see an accelerated sell-off in the next few days. The assumption is that the ETFs would attract institutional investors, who don’t have time to use online exchanges. It could also affect the thinking of BlackRock and other large institutional investors who are interested in the industry.
The idea of a Bitcoin ETF was initiated by the famous Winklevoss brothers who launched their bid for an ETF four years ago. Their offer was rejected and just last month, the SEC rejected another offer.
In making its ruling, the SEC did not talk about the value of the Bitcoin and other currencies. Instead, it based its thinking on risks regarding the crypto sector which include fraud and market manipulation. In recent days, there have been reports about cryptocurrency manipulation.
The denial for ETFs was also a blow to the CBOE and CME, the two biggest futures exchanges in the world. Last year, the two organizations introduced Bitcoin futures, which have underperformed since then.
The BTC/USD pair is trading at $6320, which is slightly higher than the intraday low of $6185. The price is below the 50 and 100-day moving average, with the pair making a symmetrical triangular pattern. With no catalyst in sight, the pair is likely to continue its downward movements.
