Within 24 hours the world’s largest cryptocurrency –Bitcoin BTC has dropped to a new low of almost 10 percent against the U.S. Dollar. On the first day of December, the reported price drop of the digital currency was 8 percent. The downfall is proving December to be a rough month for the cryptocurrency by far.
As per the reports from Coindesk, at 12:28 pm HK/ SIN (11:28 pm E.T on Thursday) Bitcoin was trading at the rate of $3,337 due the steep fall of 9.88 percent in the last 24 hours.
The second and the third largest cryptocurrencies- Ripple (XRP) and Ether (ETH).
On the other hand, other cryptocurrencies in the crypto world also saw dreadful dips in the period of the last 24 hours. Ripple XRP the second largest cryptocurrency had to face 10.62 percent drop. And Ether ETH showed a disheartening 15.90 percent; as per the reports from Coindesk.
Cryptocurrency has seen new lows this year. From the all-time whooping high of $20,000 in 2017 to the current value of $3,337, the year 2018 has given a hard time to cryptocurrency. The market value of the digital currency has dropped down to almost 87.09 percent this year from its high in January. The per day trading volumes of the cryptocurrency has also grown low, showing a drop of 61.65 percent since January, according to the data collected from Coinmarketcap.
On Thursday, an update was seen from the U.S. Securities and Exchange Commission (SEC) about the approval process for the proposal of amending the allowance of Bitcoin exchange-traded fund ETF. VanEck SolidX Bitcoin Trust is the ETF under discussion. VanEck SolidX Bitcoin Trust is a collaboration of VanEck (a money management firm) and SolidX (a Blockchain company.) It is a third attempt of VanEck for creating a Bitcoin ETF.
According to Eduardo A. Aleman, assistant secretary in the SEC, it is wise to extend the decision-making on the proposed rule change. The reason behind this prolonged decision time is to consider the proposal for a change in the ETF rule more deeply. Before this when SEC decided to delay the decision on the VanEck SolidX Bitcoin Trust, it resulted in 9 billion dollars wiped off the Bitcoin value.
ETF helps track the rates of a financial asset which is listed on an exchange. With the help of an ETF, the trader or the investor does not have to purchase any financial asset directly. The ETF route suits investors like institutional investors for gaining access into the cryptocurrency investing system in a much safer way than to first buy Bitcoin from any cryptocurrency asset exchange.
In a cryptocurrency conference that took place in Washington D.C., one of the five commissioners of SEC, Hester Peirce said-
“Don’t hold your breath. I do caution people to not live or die on when a crypto or Bitcoin ETF gets approved. You all know what I am working on trying to convince my colleagues to have a bit more of an open mind when it comes to crypto. I am not as charming as some other people.”
At the same conference, the commissioner added that the approval of the Bitcoin ETF is really unpredictable. It can take a day or even ten years, although she assured a definite institutionalization of the crypto. She based her assurance on the infrastructure that surrounds the asset class and is getting stronger over time.
Cryptocurrency exchange and cryptocurrency futures market called ErisX received $27.5 million from Nasdaq (the second largest stock market in the world) and Fidelity (the fourth largest manager). This move shows a lot of confidence in the development of the infrastructure in the cryptocurrency market for institutional investors.
The oscillating ETF trajectory
The SEC rejected the Bitcoin ETF filing of the Winklevoss twins in July. The rejection was based on the fact that the filing depended on the cryptocurrency exchange to decipher the base rate of the currency.
In August, ETF faced another rejection by the SEC. This time, eight of the Bitcoin ETF filings were rejected because they used the CME and CBOE futures market to analyze the Bitcoin rates.
The reason why the ETF filing of VanEck SolidX Bitcoin Trust is stirring the hopes of the investors and the traders is because of the Trust’s ten years’ long track record in the Financial sector. VanEck utilizes the Over-the-counter (OTC) market to establish the rates of cryptocurrency which gets the ETF backing. Therefore, this time the VanEck SolidX Bitcoin Trust’s ETF filings were based on a different approach in comparison to the nine ETF filings that were made before it that got rejected by the SEC. In the last year, several reports have been supporting this idea that in case the OTC market proves to be larger than the cryptocurrency exchange market, the SEC may get to reconsider the approval of the ETF that is backed by a new market altogether.
On the other hand on Thursday, the lawmaking bodies of the U.S. were found trying to introduce new rules for the cryptocurrency industry. The aim is to offer better security to the investors and the traders of cryptocurrency in the U.S. and thus, marinating U.S.’s lead in the crypto landscape.