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From around 14:00 UTC on July 10, Bitcoin fell $962 from its previous price in a little over an hour, landing just above the $12,000 psychological support before another wave of sellers dragged it to a peak low of $11,445.
Yesterday was a pretty crazy day for Bitcoin whose price made a few attempts to settle above $13,000 against the US Dollar. However, the BTC/USD pair failed to gain momentum and started a sharp decline below $12,800 and $12,500. The recent decline dragged Ethereum, BCH, LTC, XRP, and the crypto market cap lowered significantly. BTC broke the $12,000 and $11,800 support levels to move into a bearish zone.
The truth is, during the past few weeks, Bitcoin prices went insane skyrocketing to nearly $14,000 on June 26 before plunging all the way back to about $9,600 on July 2. The price of one bitcoin has since rebounded to $11,522 at the time of writing and it seems that correction is not ending yet.
And while some analysts and media think that this slump is correlated with yesterday’s warning by Federal Reserve Chairman Jerome Powell who said that Libra “cannot go forward”, we think that it’s moneymakers who manipulate the market while Bakkt and Fidelity’s platform are not being launched yet.
But let’s take it from the beginning. Last week, Congresswoman Maxine Waters had, in her letter to the Congress, asked Facebook to “immediately cease implementation plans until regulators and Congress have an opportunity to examine these issues and take action”. Then, Benoit Coeure, the executive board member of the ECB called Libra “too dangerous”.
In the Beginning, There Was Bakkt
Intercontinental Exchange ICE, the parent of the New York Stock Exchange revealed its vision for Bakkt already in August last year. This hotly anticipated Bitcoin futures market is still awaiting regulatory approval.
First ICE planned to launch Bakkt in mid-December. Then it got pushed back to late January. Then, on New Year’s Eve, the launch was again delayed. In February, Commodity Futures Trading Commission (CFTC) told the platform that if it were to have custody over its customers’ crypto, it would have to take additional steps to comply. In particular, the CFTC would “require disclosures of the venture’s business plan and a public comment period, which would have further delayed approval.”
Since then, Bakkt and the CFTC were trying to find other ways the platform can handle the futures contract so that it is compliant with the regulator. Last month, ICE announced the launch of its Bitcoin Futures platform on July 22, 2019. Hopefully, this will really happen.
But why are SEC and other financial institutions so much against ICE and Bakkt? Seems pretty obvious. ICE is not a bank or state-regulated custodian and it has its own clearinghouse, ICE Clear US. So, when the time comes, big financial institutions will not be able to regulate the market as they will.
Last but not least is crypto derivatives provider, ErisX to whom the CFTC cleared the way to offer futures contracts with a new license approval. The approval means the company can now launch crypto futures products under the auspices of the U.S. regulator.
With that in mind we can agree that, when this happens, BTC price is determined to go up. Or, as Fidelity’s co-founder and chief legal officer Philip Liu said:
“Big players like Fidelity coming into this space and saying ‘we’ll custody your Bitcoin’ … that type of assurance is invaluable. The big players will be critical for future adoption.”