According to widespread reports, Bitcoin has plunged further down by 10% against the US dollar in the past 24 hours. This marks another great plunge for the largest cryptocurrency in the world. Hopes have dashed down for after the news hit the wire. It wasn’t a great year for the digital currency as its price dropped by 8% on the first day of the month. It needs to be mentioned that Bitcoin traded at $3,337.32 as of 12:28 pm Hong Kong/Singapore time. It fell further to 9.88% over the last 24 hours.
Having said that, the world’s second and third largest cryptocurrencies XRP and Ether also witnessed a sharp decline by 10.62% and 15.90% respectively in the last 24 hours. Experts believe that this time of the year is not very suitable for cryptocurrency value. In fact, the market was seen dipping by almost 87.09% from a whopping high in January. It is also being said that the 24-hour trading volumes have also plunged about 61.65% since then.
The role of the Exchange Traded Fund (ETF)
The U.S. Securities and Exchange Commission (SEC) is said to have approved the process for a rule change proposal for the allowance of a Bitcoin Exchange Traded Fund (ETF). An ETF helps in tracking the price of an asset and is listed on an exchange. In fact, they are seen as institutional investors to get into cryptocurrency investing in a safer way than purchasing bitcoin on a crypto-asset exchange.
The ETF concerned here is the VanEck SolidX Bitcoin Trust, created with the principal merger of money management firm VanEck and blockchain company SolidX.
Cause of the sharp Cryptocurrency slide
On Dec 6, news agency CNN said that the slide was inevitable due to the sheer intensity of its sell-off throughout the past month. Analysts had predicted a potential drop to $2,900 in their Bitcoin price predictions if the cryptocurrency failed to gain momentum.
Experts also suggest that the low volume of the assets is worrisome because the sell-off of cryptocurrencies exhibited a free fall.