In the recent trial of tensions involving the cryptocurrency markets, the trading action surrounding Bitcoin has been particularly volatile. The surge and subsequent decline in the price of Bitcoin over the past few days can be traced back to the recent legal proceedings involving Grayscale Investments and the United States Securities and Exchange Commission (SEC).
Previously, a court ruled that the SEC was “arbitrary and capricious” when it rejected Grayscale’s application for a Bitcoin spot Exchange-Traded Fund (ETF). Consequently, Bitcoin’s price soared, reaching a two-week high. But the rejoice was short-lived. The recent SEC’s stall to make a decision on seven pending Bitcoin spot ETF applications acted like a cold shower, and Bitcoin’s price began a downward spiral, shedding almost all of its gains from the preceding Grayscale court victory, as reported by Cointelegraph. Seeing the cryptocurrency tumble by approximately 5% in just 24 hours has surely left many traders feeling uneasy.
The sudden change of direction suggests the precariousness of cryptocurrency markets. They can be subjected to rollercoaster-like movements when larger macroeconomic actors, such as Grayscale Investments or the SEC, get involved. According to Cointelegraph Markets Pro data, Bitcoin’s price is now hovering around $26,000, a far cry from the $27,300 level it had been maintaining after the Grayscale win.
Yet, one could also argue that the SEC’s delays could be an intrinsic part of a detailed legal procedure. The regulator now has another 45 days to approve, deny, or further postpone the ETF applications. In fact, Bloomberg ETF analysts Eric Balchunas and James Seyffart, were among those who anticipated the delay. Potentially, a spot Bitcoin ETF’s approval holds a 75% chance this year, according to Balchunas, marking an optimistic shift from an earlier 65% prediction.
Also noteworthy is the EU’s move into digital currency. Interestingly, the European Central Bank (ECB) and IBM Consulting recommend discretion for its implementation, advising a “go slowly but surely” approach. The consultancy suggests starting with a minimal viable product for faster deployment, and conducting operations within a sandbox for tackling the complexities of the future digital euro’s operational environment.
Indeed, the market’s rounds could be a stark reminder of the innate volatility and unpredictability of the cryptocurrency sphere. However, they also highlight the unassailable fact of continual innovation and potential growth within the digital currency space. The market is in its infancy, embarking on uncharted territories daily, rhythmically weaving its way through triumphs and challenges.
Source: Cointelegraph
