Daily Bitcoin News Update
A 10% drop in BTC prices over the course of 24 hours is no longer as alarming as it used to be. Perhaps investors are slowly getting complacent to price volatility. But a 10% drop in a matter of a few minutes? Now that should certainly send shockwaves across the market, no matter how risk-loving that crypto investors get.
This is exactly what happened on Wednesday afternoon, when Bitcoin prices took a deep sudden plunge, leaving everyone in a tizzy. Three negative events transpired side-by-side in this short time frame, all of which adversely affected investor sentiments.
Chart courtesy of TradingView.com
But as I list them, take note that none of these truly affects Bitcoin’s fundamentals.
- One of the world’s largest cryptocurrency exchanges, Binance, got hacked on Wednesday. Before the exchange could restore trading, fear, uncertainty, and doubt (FUD) had already spread like wildfire. The exchange fully compensated all trading accounts, keeping all of its investors safe from the hack, but by then, many fearful investors had offloaded their holdings.
- The U.S. Securities and Exchange Commission (SEC) issued a statement on Wednesday demanding all cryptocurrency exchanges operating in the country to register with the regulatory authority if they sell securities. By securities, the SEC means all cryptos issued through initial coin offerings (ICOs). The fear of regulations delivered the second blow to prices.
- Finally, Japan’s financial watchdog punished two cryptocurrency exchanges on the same day. Japan’s Financial Services Agency (FSA) temporarily suspended operations of crypto exchanges FHSO and Bit Station for a period of one month due to their unsatisfactory security. Moreover, the regulatory body demanded four other exchanges to beef up their security. The FSA is laying a heavy hand on exchanges following the Coincheck hack in January, which is cited as the biggest crypto coin heist in history.
Now that you’ve a background on Wednesday’s Bitcoin price crash, let me reiterate that none of these events would directly impact Bitcoin in the long run.
The Binance hack was not really a hack, after all, since no money was stolen and all trading restored within hours. So this is a non-issue now.
The SEC’s demand for registration would only affect small local exchanges or foreign crypto exchanges operating in the U.S. It does not affect the country’s largest crypto exchange, Coinbase, or its sister arm, GDAX, both of which drive most of Bitcoin’s trading volume in the U.S.
This is because these exchanges only list “commodity” cryptos like Bitcoin. Mind you, cryptocurrencies not issued through ICOs, like Bitcoin, do not fall under the definition of securities. Instead, they are identified as “commodities” by the SEC. So this regulation won’t apply to them.
Finally, Japan’s demand for stronger security on exchanges actually bodes well for Bitcoin, since it may help restore Japanese investors’ faith in cryptos following the $530.0-million Coincheck hack.
The one-month long suspension of only two of the many domestic cryptocurrency exchanges may have a short-term effect on Bitcoin prices, but it shouldn’t last in the long run.
In a nutshell, none of these events warrants a review of our long-term Bitcoin price forecast, which takes root in Bitcoin’s fundamentals. Once the dust settles, prices should restore their upward momentum. Therefore, we hold true to our BTC price target of $15,000.