Bitcoin (BTC) experienced a sharp decline below $30,000 as concerns surrounding the fate of the first spot exchange-traded funds (ETFs) emerged. This drop in price occurred after the Wall Street open on June 30, causing panic in the market.
According to data from Cointelegraph Markets Pro and TradingView, BTC’s price plummeted, briefly reaching $29,500. The volatility in the market was triggered by a report stating that the United States Securities and Exchange Commission (SEC) had rejected applications for the first Bitcoin spot-price ETFs. These applications had previously propelled BTC to new yearly highs.
The Wall Street Journal reported that the applications had been returned by the SEC, citing an unidentified source. Consequently, BTC/USD dropped to its lowest point in nine days before rebounding to hover around $30,000. The report outlined the specific reasons for the rejection, with market observers suggesting it was merely a technicality. The SEC had returned the filings because they failed to name the spot bitcoin exchange and provide adequate information about surveillance-sharing agreements. However, industry experts claimed that this setback could be resolved by asset managers updating the language and refiling the applications.
While the market experienced a brief recovery, with claims that the SEC’s rejection was just a technicality, the price of Bitcoin still traded over $1,000 lower than its daily highs at the time of writing.
The rejection of the Bitcoin ETF applications coincided with the release of U.S. macroeconomic data that added further confusion to the broader risk asset markets. The Personal Consumption Expenditures (PCE) Index, the Federal Reserve’s preferred inflation metric, recorded a lower than expected rate, marking its biggest drop in a year. Despite signs of slowing inflation, markets began pricing in a higher likelihood of interest rate hikes resuming in July.
CME Group’s FedWatch Tool indicated a nearly 90% chance of a 25-basis-point hike in interest rates next month. Financial commentary resource The Kobeissi Letter acknowledged the lower inflation rate but argued that it was still too high. Although the core PCE inflation remained unchanged since December 2022, it was still at 4.6%, a significant concern for the Federal Reserve.
Despite the price volatility and uncertainty in the market, it is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and exercise caution when making investment decisions.
Overall, the downward movement of Bitcoin’s price below $30,000 and the rejection of ETF applications by the SEC have created turbulence in the market. The impact of these developments highlights the ongoing challenges and uncertainties surrounding the regulatory landscape for cryptocurrencies and their associated investment products.