Crypto News | Reasons Behind the Latest Bitcoin Price Drop

On Wednesday, in just one hour, between 3 PM GMT (10 AM EST) and 4 PM GMT (11 AM EST), the Bitcoin price dropped sharply by a bit over $1000, from $10,723 to $9,712. It has been struggling to recover since, and is only now playfully grazing the 10K limit, at $10,018 (11:30 GMT).

But what are the reasons behind this sudden and pretty hefty Bitcoin price drop? And more importantly, how come that BTC has been having such a hard time for the past two months, even after all the breakthroughs with SegWit and the Lightning Network, with faster transaction times and lower fees than ever before?

Among the news that contributed to the drop, we feel that we should point out the various rumors of a Binance hack. Allegedly, some investor accounts were compromised. Apparently, the rumors spread from Reddit. Binance CEO Changpeng Zhao tried to address these concerns via Twitter. He said that all customer funds were perfectly safe and that the accounts which may have incurred losses were victims of phishing. Nevertheless, Binance automatically froze all withdrawals and conducted an internal investigation.

But this is not the only bad thing that happened over the last 24 hours. On Thursday, the Japanese Financial Services Agency (FSA) suspended two cryptocurrency exchanges, FSHO and Bit Station, for a whole month. The agency ordered these exchanges, in addition to Coincheck, Tech Bureau, GMO Coin and Mister Exchange to improve their security practices. The move happened in response to the recent massive NEM hack, when 500 million dollars’ worth of tokens went missing.  

Additionally, the U.S. Securities and Exchange Commission (SEC) ruled that all online platforms which trade digital currencies are considered securities under existing guidelines, which means that they have to register with the commission. The SEC believes that many exchanges try to misrepresent themselves as being regulated by the SEC, but they are not. In order to use the title “exchange”, they have to register as a “national securities exchange” and be subject to strict regulatory standards.

The biggest thing causing the BTC price to drop, however, is the ghost of the now defunct exchange Mt. Gox, which is now haunting the crypto market. Nobuaki Kobayashi, the attorney in charge of handling the remaining assets of the bankrupt exchange, has been flooding the market with tokens worth $400 million in an attempt to sell off all assets at the highest price possible. The scary thing is, Tokyo’s Bitcoin whale, or Moby Dick if you will, still has tokens worth more than $1.9 billion in store, which means that he has all the strength and stamina necessary to sing the already shaky and battle-worn Pequod that is the Bitcoin price, and with it, all the poor altcoins as crew members just along for the ride.

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Author: Max Rothstein

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