As the time passes by, it would seem that cryptocurrencies are dropping more and more, making a lot of investors panic. The crypto market situation has been bad throughout the year. Week after week, month after month, the bad news was piling up, and the prices kept dropping. Traders and investors keep asking themselves why is Bitcoin going down?
Of course, there was good news as well, but it would seem that the good simply wasn’t enough to outweigh the bad. Then, in August of this year, things finally started looking up. The prices were surging once more, a lot of positive development came, new projects, partnerships, and more. The investors’ confidence started coming back, and we even saw an increase in interest in cryptocurrencies.
However, the positive development soon ended, and now Bitcoin and its altcoins are in another free fall. The prices are going down once more, as the market returns to its bearish nature. A lot of investors are wondering why that is? Why is Bitcoin going down, especially after everything seemingly fell into place back in August? There are actually several reasons why this is happening right now, and while nobody can do much to fix it by themselves, it is still useful to understand what is going on.
Why is Bitcoin going down?
Bitcoin has gone down numerous times this year, and for various reasons. Whether it was oversold, or it experienced negative news, or something else entirely — these things have been known to influence its price. While Bitcoin is only one of the hundreds, possibly thousands, of cryptocurrencies, it is still a representative of the industry. As such, whatever happens to BTC, usually happens to altcoins as well.
This summer, Bitcoin went up and down multiple times, with its price oscillating between $6,300 and $8,400. Its crashes have been mostly associated with the Bitcoin ETF requests that various companies filed. So far, the US SEC rejected them all, which demonstrated their lack of trust in Bitcoin.
A lot of experts claim that it is still too early to think about the ETFs and that this is something best left for 2019. However, there is also a lot of those who believe that the time is right. Obviously, the SEC does not share their opinion, and so far, it has either rejected Bitcoin ETF requests, or it has postponed the decision. In both instances, they damaged the market, as the investors’ confidence in BTC wavered.
This is mostly what caused the Bitcoin crash back in July. When it comes to August of this year, it was pretty kind to cryptos, and it even had a small bull run that led prices up for the first time since May 2018. However, as August came to an end, and September took over, a new period for cryptos came as well.
September market crash
It all started about a week ago, on September 5th, when an old crypto wallet that has been dormant for four years started to grow active again. The wallet was filled with BTC, and it started splitting the coins into smaller groups, which it then proceeded to send to various exchanges. Nobody knew who the wallet’s owner was, and different theories soon piled up.
But, why is Bitcoin going down? Well, as mentioned, the wallet was full of BTC, and it contained around 111,000 coins, This was an equivalent to over $800 million according to BTC’s price at the time. The investors feared that, if that many coins return to the circulation, BTC’s price will go down either way. So, many of them cashed out, and the price dropped anyway.
Then, only days later, Goldman Sachs announced its decision to postpone opening crypto trading desks. Instead, they would focus on other projects, until better regulations arrive and reduce the risks for institutional investors. This has hit the market hard, as many believed that cryptos entering the Wall Street would be the real game-changer for digital currencies. Now, it would appear that it still won’t happen.
These days, many believe that the price was manipulated on purpose and that whoever made the BTC dump, had some insight in Goldman’s trading desk plans. The fact is that the SEC claimed that BTC is still too easily manipulated and that it is not yet time to approve ETFs. According to recent events, it appears that they were right.