The recent sudden and steep drop in the price of Bitcoin (BTC) has sparked numerous theories among analysts and experts. Some commonly cited reasons include government regulations, potential price manipulation by exchanges and Bitcoin whales, over-leveraged traders, and even conspiracy theories involving Tether (USDT).
Between August 15th and 18th, BTC experienced a significant 12% decline, following a pattern that has been observed before. However, due to the decentralized nature of cryptocurrencies and the lack of transparency in exchanges, it is difficult to determine the exact cause of such price movements.
One prediction made by Ceni, a co-founder of Ceni Capital, turned out to be partially accurate. Ceni predicted that the price of Bitcoin would drop below $29,000, speculating that the U.S. Securities and Exchange Commission (SEC) would delay their decision regarding the Ark Bitcoin ETF. Although the timing and exact support level were not specified in the prediction, it still raises questions about potential influencers of the market.
Ceni specifically pointed towards BlackRock as a possible instigator of Bitcoin’s crash, suggesting that the financial institution could benefit from a lower Bitcoin price before launching a spot-based Bitcoin ETF. However, it’s not as straightforward as it might seem. BlackRock has built a reputation based on market stability and investor confidence. A substantial drop in Bitcoin’s value could undermine the credibility of the cryptocurrency market, something BlackRock would likely want to avoid.
Obtaining regulatory approval is also crucial for launching any financial product, especially in the cryptocurrency domain. The SEC carefully assesses the potential for market manipulation and investor protection before granting approval. Engaging in any activities that could be perceived as price manipulation could jeopardize BlackRock’s chances of securing the necessary regulatory approvals for their ETF offering.
Furthermore, instilling investor confidence is paramount when introducing a novel investment product like a Bitcoin ETF. A sharp Bitcoin price drop could erode trust among investors, not only in the asset class itself but also in the ETF. Therefore, BlackRock’s interest likely lies in launching the ETF during a period of positive sentiment, where investors feel confident about the potential for future gains.
While BlackRock has been suggested as a possible culprit, other theories point to government regulations as a reason for Bitcoin’s price drop. These theories suggest that governments may take steps to control stablecoins and exchanges located outside the United States in order to reduce demand and strengthen the U.S. dollar. However, it’s important to note that governments typically hold only a small portion of all Bitcoin, so their influence on the entire market is limited.
Another theory involves betting against the price of Binance Coin (BNB). However, this theory has its own challenges. To bet against BNB, one would need to borrow it, which is not possible on regulated platforms. Additionally, monitoring Binance’s transparency page can provide insights into the exchange’s Bitcoin wallets and any potential anomalies, such as the misuse of customer funds or financial problems.
It’s crucial to acknowledge the complexity of cryptocurrency markets, exchanges, and regulations. While theories and speculations may provide some insights, the reality could be very different. Ultimately, it is difficult to determine the exact cause of Bitcoin’s price drop, and it is important to approach such theories with caution.
As always, this article is for general information purposes and should not be considered legal or investment advice. The views expressed here are solely the author’s and do not necessarily represent the views of Cointelegraph.