Why BTC dropped to $6.5K: VanEck Exec highlights 4 Possible Reasons
A VanEck Executive has given four possible reasons why the price of Bitcoin dropped to $6500 mark.
Gabor Gurbacs, the digital asset director at investment management firm VanEck has pointed out four reasons behind Bitcoin drop and says that the decrease in the value of the coin is the result of financial and geopolitical factors.
He highlighted these reasons in a tweet and said that these factors may have caused a decline in the price of Bitcoin.
The following pointers may have contributed to Bitcoin’s latest price decline:
> China/PBOC crack-down scared investors to re-enter at lower prices
> 2019 year-end tax-loss arbitrage
> Lots of recent product development and M&A is funded with crypto
> Generally lower liquidity— Gabor Gurbacs (@gaborgurbacs) November 25, 2019
Followings are these four reasons:
1) China is cracking down on Crypto exchanges
He said one of the reasons behind this drop is that the Chinese government is cracking down all the crypto exchanges in the country. Recently, China has shut down 173 crypto exchanges and token issuing platforms.
These exchanges were offering their bitcoin services and now investors have pulled back from these exchanges. During his other post, he said:
I think investors are worried about China crackdown news and hence some second guess their re-entry point and lower prices.
2) 2019 year-end tax-loss arbitrage
Tax reporting arbitrage might be another reason behind this BTC drop.
The US investors might be forcing the markets to drive lower so that they could record a negative performance on their holdings for 2019 year-end tax-loss arbitrage.
3) Generally lower liquidity
Gabor Gurbacs said that the liquidity on Bitcoin trading is facing a squeeze. He said that the Bitcoin liquidity is evaporating fast and advised to remain to be careful because the market can snap fast in any direction. As he said:
Bid-offer spreads widest in the past 3 months. Be careful out there. Market can snap fast any direction. Ease into positions. Avoid large/any market orders.
4) Product development is funded with Crypto
The last reason he highlighted that might have forced bitcoin’s price to lower is that lots of recent product development and mergers and acquisitions (M&A) may be funded with cryptocurrency.
So these are the four possible reasons that VanEck executive Gabor Gurbacs has highlighted behind BTC price drop to $6.5k.
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