Bitcoin has been fluttering around the $20,000 mark for a couple of weeks, but today’s drop will have some investors concerned it will continue the long decline it has been on since March, and fall even further
Bitcoin‘s value fell sharply on Thursday morning, collapsing from just below $20,000 to around $19,400 in a matter of minutes.
It has been fluttering around the $20,000 mark for a couple of weeks, but today’s drop will have some investors concerned it will continue the long decline it has been on since March, and fall even further.
Bitcoin has lost around 3 per cent of its value in the past 24 hours, while other major coins are also down.
Ethereum is down by 6 per cent and is currently valued at around $1,050, while the likes of XRP, Solana and Binance Coin have also lost value.
Why has Bitcoin’s price fallen?
The drop in value comes after the United States’ Securities and Exchange Commission (SEC) made an statement on cryptocurrencies on Wednesday.
Speaking about regulation, SEC chair Gary Gensler told CNBC: “Some like Bitcoin, and that’s the only one I’m gonna say… my predecessors and others have said, they’re a commodity.”
He added that other coins should be classified as securities and regulated by the SEC.
“Many of these financial assets, crypto financial assets, have the key attributes of a security… the investing public is hoping for a return just like when they invest in other financial assets we call securities,” he said.
This sounds like good news for Bitcoin investors. Digital asset fund manager Eric Weiss tweeted in response: “Gensler is the second consecutive SEC chair to declare that Bitcoin is a commodity, making it all but impossible for this classification to be altered in the future. Very significant indeed.”
Michael Saylor, CEO of Microstrategy, added that Bitcoin’s classification as a commodity “allows politicians, agencies, governments, and institutions to support bitcoin as a technology and digital asset to grow the economy and extend property rights and freedom to all”.
However, it did not take long for the bad news to arrive. Later on Wednesday the SEC rejected digital currency investment firm Grayscale’s application to convert its Grayscale Bitcoin Trust to an exchange-traded fund.
Grayscale has said it will sue the SEC.
“Grayscale supports and believes in the SEC’s mandate to protect investors, maintain fair, orderly, and efficient markets and facilitate capital formation – and we are deeply disappointed by and vehemently disagree with the SEC’s decision to continue to deny spot Bitcoin ETFs from coming to the US market,” Grayscale CEO Michael Sonnenshein said in a statement.
What do experts predict for Bitcoin?
Changpeng Zhao, the founder of the world’s largest crypto exchange, Binance, has said Bitcoin may take years to recover from the recent crash.
“I think given this price drop, from the all-time high of $68,000 to $20,000 now, it will probably take a while to get back. It probably will take a few months or a couple of years,” he said.
How risky is cryptocurrency?
People invest at their own risk and cryptocurrencies are not regulated by British financial authorities.
All crypto investments are risky, but meme coins like Shiba Inu are particularly volatile, and you should be prepared to lose everything you invest.
The Financial Conduct Authority (FCA) warned in January: “Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money.
“If consumers invest in these types of product, they should be prepared to lose all their money.”
