It certainly has been a day to forget for crypto traders. In afternoon trade the market is a sea of red with heavy declines being seen across the board.
At the time of writing the value of the entire market is down to US$232.95 billion according to Coin Market Cap. This is a decline of 3.5% since this morning and a sizeable 7.5% over the last 24 hours.
This has been driven largely by a sharp decline in the Bitcoin (BTC) price. It has fallen 6% over the last 24 hours to US$6,569.71 per coin, reducing its market capitalisation to under US$113 billion.
The world’s largest cryptocurrency has been hit hard today after the U.S. Securities and Exchange Commission announced that it has postponed a decision on whether to approve the listing of an exchange-traded fund (ETF) backed by Bitcoin.
According to Bloomberg, the agency has pushed back the decision to approve or disapprove a proposed rule change from CBOE Global Markets that would allow an ETF from VanEck Associates Corp and SolidX Partners to list.
The initial deadline was due to expire next week, but has now been extended to the end of September. Crypto traders appear to be interpreting this as a sign that the agency will reject the change and block the Bitcoin ETF from listing.
Which I don’t think would be a big surprise considering the U.S. SEC rejected an ETF from the Winklevoss twins late last month. The agency cited concerns over security, market manipulation, and investor protection issues.
Nevertheless, it would still be a bitter blow for traders that had been betting that the launch of an ETF would result in increasing demand, supporting or even lifting prices.
Unfortunately, Bitcoin’s selloff appears to have had a knock-on effect to the rest of the market.
Over the last 24 hours the Ethereum (ETH) price has fallen over 8%, Ripple (XRP) is down almost 14%, Bitcoin Cash (BCH) is down 9.8%, and EOS (EOS) has sunk over 14%.
It hasn’t been much better outside the top five with alt coins including Stellar (XLM), Litecoin (LTC), and Cardano (ADA) all falling heavily.
While the approval of a Bitcoin ETF next month could reverse these declines, I think the safest option would be to sit on the sidelines and focus on other investment opportunities.