Bitcoin slipped below $6,000. If there is anything that we should expect, there is a possibility that we will be seeing Bitcoin in a new low in the coming days. In fact, it was quite near its lowest level of the year. Along with Bitcoin, XRP and Ethereum dropped in value as well. Bitcoin tumbled as low as $5,900 only to rebound above $6,000 once again.
Bitcoin’s lowest point this year was at $5,785 which happened on June 18. In fact, in just 24 hours, the entire crypto market lost around $21 billion. Ether fell to its lowest level since September of last year.
SEC and Bitcoin ETFs
One of the reasons why Bitcoin was able to reach $8,500 last month is due to the excitement of investors on the possible Bitcoin ETF approval. However, things aren’t looking good after the SEC rejected the Winklevoss twins’ Bitcoin application for the second time around. It was coupled by SEC’s move to postpone its decision regarding Bitcoin ETFs.
Many believe that a Bitcoin or crypto-related ETF is necessary in order to get institutional investors involved within the niche. BlackRock, which is an asset management company and the collaboration of Intercontinental Exchange with Starbucks and Microsoft are all positive signs that we are actually possibly seeing this kind of scenario.
According to Charles Hayter who is the chief executive of digital comparison website CryptoCompare, he described this bearish trend as “momentum-based selling following the ETF kickback”. He also considered it as “the usual gyrations of a market in depressed mode”.
It Needs Time?
If you are going to ask Meltem Demirors, she believes that it takes a long time for a new technology to be understood by the market. She mentioned on CNBC’s Fast Money that “New technologies that shift the paradigm take a long time to really understand”. And so far, Bitcoin as a means to safeguard asset is far from happening considering how much Bitcoin has lost since it peaked last December nearing $20,000 at one point. In fact, even the announcement that the Intercontinental Exchange is going to collaborate with Microsoft and Starbucks did little improvement to Bitcoin’s price.
Demirrors mentioned that “The narrative around Bitcoin is still really hard to grasp”. She also added that “really the only metric we have for most cryptocurrencies is the price, and price is such an imperfect metric. What does actual utilization look like? That’s really the struggle for crypto right now”.
She pointed out that both institutional and retail investors shouldn’t mind the price of cryptocurrencies. This is similar to the early days of Amazon, Intel, or even Microsoft. These companies were also highly volatile in the beginning. However, these companies were able to recover from the dotcom bubble.
She mentioned that: “What we saw in crypto was this massive run-up, where everyone got ‘FOMO,’ or fear of missing out, as we like to say. What it caused is a speculative bubble”.
Is Vitalik Buterin correct saying that we should focus on adoption rather than having a Bitcoin ETF? Could this help the crypto industry better in the long run?