Bitcoin and other cryptocurrencies are struggling especially after a South Korean cryptocurrency exchange was hacked a few days ago. But now, Bitcoin has been showing small improvements. To give you an idea just how much is lost from the entire crypto market, an estimated of around $28 million was lost for lesser-known altcoins alone. The good news is that Bitcoin has slowly recovered and is currently at $6,546.75.
Are Investors Spooked?
It is quite apparent that investors are spooked by the attack that occurred in CoinRail. To give you an idea how badly cryptos need another bull-run, in June alone, the crypto market lost 30% of its value. However, it is also worth mentioning that there are a number of things that may have created this problem.
For Wall Street Investment firm Fundstrat’s CEO Tom Lee, he says that the crash can be attributed to the Cboe bitcoin futures. Since the futures have been launched around December 2017, the price plunged. Tom Lee mentioned that “Bitcoin sees dramatic price changes around CBOE futures expirations. This was something flagged by Justin Saslaw at Raptor Group. We compiled some of the data and this indeed seems to be true”.
He also added that “overall, bitcoin has fallen 18 percent in the 10 days prior to CBOE contract expiration”. He also added that “Bitcoin has fallen 18 percent in the last 10 days prior to CBOE contract expiration”.
Question Regarding Manipulation
Another reason that could’ve affected the price lately was the study that was made by a researcher in the University of Texas. The published study suggests that there was a sign that Bitcoin’s price in 2017 was manipulated. It was suggested that $2.5 billion-worth of Tether has been used in order to manipulate Bitcoin’s price.
There was also the hesitation on the part of regulators when it comes to cryptos. For instance, you have Reserve Bank of India’s move to restrict banks from dealing with crypto-related businesses. And the worst part is that India’s central bank also doesn’t have a concrete reason why they made such a move. In fact, not even a whitepaper was used as a basis. And because of this, crypto exchanges have decided to take things to the supreme court.
Good News This Week
But if there is a reason to celebrate this week, Ethereum was decided by the SEC to be considered not as a security. SEC Corporation Finance Director William Hinman mentioned that “Based on my understanding of the present state of ether, the Ethereum network and its decentralized structure, current offers and sales of ether are not securities in transactions”.
This coincides with what Jay Clayton mentioned recently that cryptocurrencies are not securities, but rather used as a replacement for fiat currency.
Will the price of cryptocurrencies continue to go up in the coming days or will this be shortlived once again? There was even a prediction that we should be expecting Bitcoin to reach $5,000 before we see another bull-run. If this is the case, then the worst days are yet to come for Bitcoin and other cryptocurrencies.