The King of cryptocurrencies plunged abruptly to $29,500 just a few minutes ago, triggering a faster sell-off among altcoins. The altcoins, already struggling to recover, have now turned downwards following BTC’s decline. What was the reason for this drop? What pushed the price from $31,000 to $29,500 in just a few minutes?
Why Are Cryptocurrencies Falling?
According to a report from The Wall Street Journal, the U.S. Securities and Exchange Commission stated that the recent applications to Nasdaq and Cboe for spot Bitcoin ETF funds were not “clear and comprehensive.” The WSJ reported that the applications were returned for insufficient information on their supervision regulations.
It is known that sources like WSJ and Bloomberg often release significant news in advance. Indeed, we have seen similar cases with ETF applications. If these claims are confirmed by the SEC, we may see a short-term negative trend for the king cryptocurrency. However, swift reapplications following the rejections could potentially reverse the situation. Notably, the WSJ report included the following detail:
“The SEC told the exchanges that it had returned their applications because they had not provided enough information about the supervision regulations of a spot bitcoin exchange, whose name they are expected to provide as part of a ‘surveillance-sharing agreement.’ Asset managers could update the language and reapply.”
This could be interpreted as the SEC signaling to BlackRock what they need to do to cross the line and get approval.
Will Bitcoin and Altcoins Rise?
Positions worth hundreds of millions of dollars closed in just 15 minutes. Investors expecting more increase were supported by U.S. PCE data today, but then the WSJ dropped the bombshell. We mentioned this topic a few days ago in our list of “potential surprise developments in the coming days.” Leaks from the SEC were already expected to cause such market fluctuations. Now, we might see Gensler or different authorities start to comment openly in the next day or hours.
In addition, comments on the issue from trillion-dollar companies, especially BlackRock, could intensify the excitement. If there is a deficiency, a $10 trillion asset management company should be able to fix it. If the SEC is arbitrarily reporting a deficiency here, we are talking about a company that has the power to question it.
Crypto is full of surprises, and the last move may not be as bad as we thought. The only thing that seems certain is that the negative sentiment in the market could continue to increase for the next few days until the uncertainty clears (until the SEC, BlackRock announcements arrive).
