Bitcoin News

Bitcoin Price News: Bitcoin Down 7% to $7,500, Crypto Market Drops $30 Billion

Just when it looked as if Bitcoin and the cryptocurrency market had matured enough to absorb even a major setback, both have once again gone into a rapid and worrying decline. Is this yet another example of a basic lack of backbone by BTC investors?

At some point today (August 2), Bitcoin investors, BTC users, owners of other cryptos or just supporters of the digital currency ecosystem will be hit with an all-too-familiar, yet still painful body blow, as the see headlines telling them that for the umpteenth time this year, BTC is in steep decline.

The figures tell the story: In the past 24 hours, Bitcoin’s value has dropped by 7%, from a healthy $8,150, to a worrying $7,500. As is often the case, the knock-on effect is that the whole crypto market has also slumped, with $30 billion wiped off its total value.

Observers may well say that Bitcoin’s latest price drop is relatively minor, and it will most likely regroup and continue on what has been a mainly upward trajectory of late. Hopefully, they will be proved right. The problem is that for battle-hardened Bitcoin followers, we have become like the punch-drunk boxer or the dog that has been hit too many times; we are permanently on edge, nervous, twitchy, and always anticipating another thrashing, or in this case, a dramatic drop in Bitcoin’s value.

The Winklevoss Twins, Nasdaq, & The Dreaded SEC

Little more than a week ago, Bitcoin looked on course for an organically obtained valuation approaching $10,000. If the Winklevoss twins had gotten their way, and Bitcoin was indeed floated on the Nasdaq, that figure may have quadrupled before the year was out. That was until the SEC rejected plans for Bitcoin’s acceptance on to the Nasdaq as an ETF (Exchange Traded Fund), despite  Cameron and Tyler Winklevoss staking their considerably reputations on the project.

The Winklevoss twins are high-profile celebrities in the US. Huge (6’5”, 220 lbs), clean-cut and handsome, they are the epitome of America’s Ivy League. Educated at Harvard in the US and Oxford in the UK, they both excelled at rowing, and were part of the team that won gold at the 2007 Pan American games, and represented the US at the 2008 Olympics in Beijing.

The pair possess brains to match their brawn, and speculation remains that it was they who came up with the idea  for Facebook, (as suggested in The Social Network). Zuckerberg went as far to pay the twins $65 million to stop spreading the rumor.

The brothers set up Gemini, their own blockchain based exchange platform, and via Gemini,  have been placed in charge of cyber-security for the Nasdaq.  That was why the “Winklevoss Bitcoin Trust Commission” seemed beyond reproach, and yet it was unceremoniously cut down, the SEC demonstrating a clear lack of faith in the brothers, and little more than contempt for Bitcoin.

Perceived Acceptance Of SEC Rejection May Have Been Premature

The most concerning thing about this latest slump, is that there is no clear reason why it’s happened. A valuation drop is brought about by investors offloading large amounts of a cryptocurrency at a price on or below the market recommendation.

In the cryptocurrency industry as in any business, it is inevitable that certain events will take place and influence the market positively or negatively. When Facebook announced it was banning cryptocurrency advertising from its pages, the overall crypto market lost almost 50% of its combined valuation within a matter of days, the result of hordes of investors panicking and desperately offloading vast amounts of cryptocurrency at ridiculously low prices.

Five months later, in late June, when Facebook did an about-turn and allowed crypto advertising across its platform, the crypto market – Bitcoin in particular – began a slow but steady turnaround, akin to an oil tanker or an ocean liner making a 360° turn. It was that return to Facebook’s pages, the credibility that came with it – not to mention the millions of Facebook users suddenly exposed to cryptocurrency which was the primary reason for Bitcoin’s recent and encouraging rally that resulted in BTC’s value rising from below $6,000 (lowest price of 2018) to  just shy of $8,500 within two weeks.

When the SEC rejected the Winklevoss-backed Bitcoin ETF, the result was a 5-hour, $500 drop in BTC value. Initially, it seemed the Bitcoin and its investors had, for the first time in its decade long history, managed to handle a negative event with a minimum of fuss and drama. Within 24-hours, Bitcoin was up to $8,200, and functioning as if nothing had happened.

Delayed Reaction

“Delayed Reaction” is a term synonymous with sports, and is often used when describing an athlete – usually a boxer – getting tagged with a very hard blow, initially seeming to cope with it, only for their legs to give out a few seconds later.

In this context, the delayed reaction is that those investors who would normally have jumped ship when Bitcoin’s ETF was rejected by the SEC, initially seemed to be willing to stick with their investment, despite the major disappointment of no Nasdaq exposure. However, true to form, days later said investors decided that sticking with Bitcoin wasn’t for them.

Hopefully, those investors have now done their worst, and at the time of writing, Bitcoin’s value had actually rose by a few percentage points and was $7,670. SEC acceptance was always going to be a longshot, especially with the first six months of 2018 being so problematic. The Winklevoss twins will no-doubt be working on a new strategy, and will probably be looking at another shot – their third – at Nasdaq acceptance for Bitcoin in early 2019.

By then, the SEC’s excuses for rejecting Bitcoin will be thinner than ever, and Bitcoin will be floated on one of the largest stock markets in the world. That should be interesting!

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