Bitcoin fell by over $500 today as a result of an SEC announcement, which formally delayed the verdict regarding the VanEck-backed ETF for 45 days. While things may be beginning to look bearish for this early-stage market, many remain hopeful when taking a mid to long-term outlook on this nascent industry.
Market Tumbles To Yearly Lows After Weeks Of Speculation
Over the course of the past few months, Bitcoin has seen an astounding recovery, moving from a yearly low at $5,800 to briefly reaching a two-month high of $8,500. While it is likely that there wasn’t a single reasoning behind this surprising run-up, investors cited the speculation regarding a promising Bitcoin ETF as a primary catalyst.
But as of Tuesday afternoon, the SEC revealed that it would be delaying the official verdict on the long-awaited Bitcoin-focused ETF, which is backed by the CBoE, VanEck, and SolidX. While the regulatory body didn’t outright deny the ETF proposal, some investors saw this as a preemptive sign of what is to come when the eventual VanEck ETF verdict rolls around.
It has become apparent that Bitcoin’s most recent bout of bullish price action had come to an unfortunate end following this announcement. At the time of press, Bitcoin is down over 7% in the past 24 hours, finding some semblance of support at the $6,500 price level. Nonetheless, Bitcoin has still fallen through the ever so important support at $6,800, which is a price level that Bart Smith of Susquehanna has mentioned on multiple occasions as a vital line of “defense” for Bitcoin technicals. Altcoins followed Bitcoin in this move downwards, with a majority of the top crypto assets posting losses that are upwards of 10%.
The collective value of all cryptocurrencies has now reached a yearly low with this round of bearish price action, with CoinMarketCap reporting that this figure currently resides at $230 billion.
Investors Remain Bullish, Despite Short-Term Worries
While some industry onlookers may describe the state of the market as “dismal,” some industry leaders remain unfazed. In fact, industry influencers like Brian Kelly don’t expect the ETF to even be approved this year, with CNBC’s foremost crypto analyst telling investors that February 2019 may be when the SEC puts its stamp of approval on a crypto-backed ETF.
Joseph Young, an editor at NewsBTC and a long-time crypto analyst, doubled-down on Kelly’s sentiment, referring to a Tweet he made on July 24th before this most recent debacle went down.
Many people reacted negatively when I said the first Bitcoin ETF most likely will not happen until February 2019 because the SEC does not have any reason to rush before the final date.
This is what happens when you give people false hope and hype. Market tanks on a nonissue. https://t.co/2kNAalzyMC
— Joseph Young (@iamjosephyoung) August 8, 2018
Speaking with CNBC Fast Money panelists, Brian Kelly brought attention to the market’s reaction regarding Tuesday’s SEC announcement, stating:
“We’ve had this big runup, we’ve had a little bit of a sell-off today. If you are selling today after this decision, its the wrong way to do crypto investing.”
While not explicitly stated, the attitude held by BKCM’s CEO may imply that he sees more in store for this market in the near future.
Taking into account the effect ETF speculation has had on Bitcoin’s price, if the SEC officially endorses a crypto ETF, which may just be a matter of time, cryptocurrencies could see an astronomical rise in prices. As Arthur Hayes, the CEO of BitMEX, puts it:
“I think that something that goes up to $20,000 in one year can have a correction down to around $6,000… (but we are) one positive regulatory decision away, maybe an ETF approved by the SEC, to climbing through $20,000 or even $50,000 by the end of the year.”