After making a series of large, legitimate moves, bitcoin appeared back on track for five-digit prices. Over the past several weeks, anticipation had buzzed over the U.S. Securities and Exchange Commission over its possible approval of a bitcoin ETF. If passed, the fund would almost surely spike cryptocurrency prices.
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But right now, the opposite is happening. Bitcoin is barely holding onto the $7,000 level. Immediate technical posturing suggests a return below $7,000, perhaps even a retest of the $6,000 support line. Other cryptocurrencies are likewise taking it on the chin. Ethereum is desperately clinging to $400, a particular disappointment due to its prior strong performances.
What happened? Experts both in traditional financial structures as well as cryptocurrencies are puzzled. The potential launch of a bitcoin ETF, which would enable greater reach into public sectors, would have a profound impact on the entire blockchain economy. Moreover, it would spark the creation of additional bitcoin funds. Here’s what CoinTelegraph.com had to say:
The markets’ nosedive today is in stark contrast to yesterday’s major news that Intercontinental Exchange (ICE) –– the operator of 23 leading global exchanges including the New York Stock Exchange (NYSE) –– plans to create a global ecosystem for digital assets that would cover the spectrum from federally regulated markets and warehousing to merchant and consumer needs.
ICE moreover plans to launch physically-delivered BTC futures contracts this November, distinct from those currently offered on CME and CBOE that are ultimately settled in fiat.
So with the prospects of bitcoin funds sprouting everywhere over the foreseeable future, cryptocurrencies should truly be buoyed by the news, not devastated. But the reason for the selloff, as you might expect, is rooted in cynicism.
As I mentioned earlier for Crush The Street, the bitcoin ETF isn’t being developed for the public’s benefit; instead, the central benefactors for any bitcoin funds are the bankers and elite opportunists backing them. That a relatively few investors enjoy massive profitability, as was the case with the gold ETF, is simply the cost of doing business.
Obviously, bankers are just like anybody else – they don’t enter into investments with the intention of losing money. And with the massive potential of the blockchain economy still untapped, top-level financiers have a chance to make unprecedented profits by entering the markets at discounted rates.
I’m not entirely privy to the mechanizations of crypto-market pricing. However, I just can’t help but notice the correlations between the gold ETF and the potentially-upcoming bitcoin ETF. Prior to the gold ETF launching, few people even considered the idea of buying gold as an investment. But when bullion-centric funds took off, they intractably altered the precious-metals landscape.
The same is very much likely to happen with the bitcoin ETF and any other bitcoin funds. Although crypto investing has taken off, it hasn’t really hit the mainstream. Bitcoin funds will change that reality, and in doing so, will indelibly alter not only the blockchain economy, but the traditional economy as well.
That’s a near-certainty. The only thing we’re debating right now is the price.