Quite a few theories emerge every time the worth of Bitcoin takes a sudden and steep dive. The same old suspects embrace authorities rules, the potential of exchanges manipulating costs, Bitcoin (BTC) whales manipulating costs, overleveraged 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 big 12% decline. This prevalence 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 shortage of transparency amongst exchanges, verifying whether or not a particular entity influenced the worth 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 US Securities and Change Commission (SEC) would postpone its resolution concerning the ARK Bitcoin exchange-traded fund (ETF).

SEC Delays Resolution on Ark Make investments’s Spot Bitcoin ETF Utility, Calls For Public Enter-8 week delay for BlackRock to govern the market. 29k ought to break quickly low cost stats for holders and institutional traders. pic.twitter.com/pcBhOho0Ax

— CENI⬛️(,) (@ceni0718) August 11, 2023

Nonetheless, it’s essential to notice that the prediction didn’t specify the timing of this occasion or the precise assist level. Consequently, the statistical basis for 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 Bitcoin ETF isn’t a short-term deal for BlackRock

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

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

Secondly, acquiring regulatory approval performs a vital function in launching any financial product, particularly inside the cryptocurrency area. The SEC meticulously assesses the potential for market manipulation and safeguards for investor safety. Participating in actions that could possibly be construed as value manipulation might jeopardize BlackRock’s possibilities of securing the required regulatory approvals for its 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 might erode belief amongst traders, not solely within the asset class itself but in addition within the ETF.

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

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

The following risk typically thought of when attempting to clarify a drop in Bitcoin’s value is the concept that the federal government will regulate the cryptocurrency sector. The motivation to control could be pushed by a need to scale back demand to make the U.S. dollar stronger.

Often, these theories counsel that steps could be taken to regulate stablecoins and exchanges which are situated outdoors the US. Market analyst Joe Kerr talked about this on X (previously Twitter):

Tinfoil hat time:

Promote Authorities Bitcoin to Coinbase to suppress value.

Get Binance to defend BNB by promoting their Bitcoin.

Drain Binance’s low cost Bitcoin and sell it to coinbase.

Binance goes broke & Coinbase has the vast majority of alternate Bitcoin (SSA req achieved).

Approve…

— Joe Kerr⚡ (@Boomstick44) August 18, 2023

Whereas this idea is fascinating, there are challenges and components that make it appear much less doubtless. First, it’s potential to considerably monitor authorities wallets, however analysts ought to keep in mind that governments normally have solely a small a part of all of the Bitcoin, so their affect on the entire market is proscribed.

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

Betting towards the BNB value and different nonsense

Subsequent, the concept of betting towards the worth of BNB (BNB) may not be so simple as it sounds. To wager towards BNB, merchants would want to borrow it, however they’ll’t try this on platforms that comply with rules.

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

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

This might counsel uncommon issues just like the improper use of buyer cash or financial issues. Precise information from these observations is extra essential than simply guessing, because it provides perception into how effectively the alternate 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 could possibly be very totally different from what’s instructed, so whereas the general public would possibly by no means know the reality for positive, an individual can at the very least dismiss such theories as BlackRock crashing Bitcoin earlier than a spot Bitcoin ETF approval.

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