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BlackRock has more to lose from a BTC price crash pre-Bitcoin ETF

CryptofreePress Staff by CryptofreePress Staff
August 22, 2023
in Bitcoin
0
BlackRock has more to lose from a BTC price crash pre-Bitcoin ETF

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Quite a few theories emerge every time the value of Bitcoin (BTC) takes a sudden and steep drop. The same old suspects embrace authorities rules, the potential for exchanges manipulating costs, Bitcoin whales manipulating costs, over-leveraged merchants, and a few conspiracies involving Tether (USDT).

SEC kicks Bitcoin ETF can down the street

Between Aug. 15 and Aug. 18, Bitcoin’s value skilled a major 12% decline. This incidence adopted a well-recognized sample, prompting quite a lot of causes put forth by analysts and consultants.

Sadly, as a result of decentralized nature of cryptocurrencies and the dearth of transparency amongst exchanges, verifying whether or not a selected entity influenced the value motion stays a difficult process.

On Aug. 11, Ceni, a co-founder of Ceni Capital, made a prediction that turned out to be partially correct. Ceni predicted a Bitcoin value decrease than $29,000, anticipating the U.S. Securities and Trade Fee (SEC) to postpone its choice relating to the Ark Bitcoin ETF.

Nonetheless, it is vital to notice that the prediction did not specify the timing of this occasion or the precise assist stage. Consequently, the statistical basis of this speculation turns into much less sure.

Nonetheless, Ceni has pointed to BlackRock as a possible instigator of Bitcoin’s crash, a declare that warrants thorough investigation.

Spot-based Bitcoin ETF will not be a short-term deal for BlackRock

The concept that BlackRock may profit from a decrease Bitcoin value earlier than launching a spot-based Bitcoin ETF will not be as easy as it might appear. Whereas the idea of a decrease Bitcoin value resulting in elevated profitability upon ETF launch is perhaps intuitive, there are a number of explanation why this won’t align with BlackRock’s broader pursuits.

At the beginning, BlackRock has constructed a repute as a revered monetary establishment primarily based on its dedication to market stability and investor confidence. A sudden and substantial drop in Bitcoin’s worth may undermine the general credibility of the cryptocurrency market, one thing BlackRock would goal to keep away from. The precedence of sustaining the market’s legitimacy may outweigh any fast good points ensuing from a low Bitcoin value.

Secondly, acquiring regulatory approval performs a crucial position in launching any monetary product, particularly inside the cryptocurrency area. The SEC meticulously assesses the potential for market manipulation and safeguards for investor safety. Partaking in actions that may very well be construed as value manipulation may jeopardize BlackRock’s possibilities of securing the required regulatory approvals for his or her ETF providing.

Lastly, instilling investor confidence is of paramount significance when introducing any funding product, notably a novel one like a Bitcoin ETF. A pointy Bitcoin value drop may erode belief amongst traders, not solely within the asset class itself but additionally within the ETF.

Due to this fact, BlackRock’s curiosity probably lies in launching the ETF throughout a interval of optimistic sentiment, the place traders really feel assured in regards to the potential for future good points.

If not BlackRock, who’s accountable for the BTC value drop?

The subsequent chance usually thought of when attempting to clarify a drop in Bitcoin’s value is the concept that the federal government will regulate the cryptocurrency sector. This may very well be pushed by causes like lowering demand to make the U.S. greenback stronger.

Normally, these theories counsel that steps can be taken to manage stablecoins and exchanges which might be situated outdoors the U.S. Market analyst Joe Kerr talked about this on X:

Whereas this idea is attention-grabbing, there are challenges and components that make it appear much less probably. First, it is potential to considerably observe authorities wallets, however we must always do not forget that governments often have solely a small a part of all of the Bitcoin, so their affect on the entire market is restricted.

Associated: Bitcoin speculators are underwater on 88% of their BTC baggage — Analysis

Betting in opposition to BNB value, and different nonsense

Subsequent, the concept of betting in opposition to the value of BNB won’t be so simple as it sounds. To wager in opposition to BNB, you’d have to borrow it, however you possibly can’t do this on platforms that observe rules.

Furthermore, by checking Binance’s transparency web page, you possibly can see in real-time whether or not their Bitcoin wallets are getting smaller in comparison with different exchanges.

Bitcoin steadiness on exchanges (whole), in BTC. Supply: Glassnode/@jimmyvs24

This might counsel uncommon issues just like the mistaken use of buyer cash or monetary issues. Precise information from these observations is extra vital than simply guessing, because it provides us perception into how properly the change is doing.

In the end, most of those theories make assumptions and simplify issues, ignoring how advanced cryptocurrency markets, exchanges, and rules are.

The true outcomes may very well be very totally different from what’s advised, so whereas we’d by no means know the reality for positive, we are able to a minimum of dismiss such theories as BlackRock crashing Bitcoin earlier than a spot-Bitcoin ETF approval.

This text is for common data functions and isn’t meant to be and shouldn’t be taken as authorized or funding recommendation. The views, ideas, and opinions expressed listed below are the writer’s alone and don’t essentially replicate or characterize the views and opinions of Cointelegraph.