We must point out that Bitcoin took a hit in value even with the recent good news that Bitcoin is adopting the Lightning network.
The main reason for the drop in price is that quite a few investors are becoming a bit nervous about the stability of the coin, especially with the upcoming decision of the Securities and Exchange Commission (SEC) on whether to approve the second proposal for a bitcoin-based exchange-traded fund (ETF) this year. The SEC had already decided against the Winklevoss Bitcoin ETF proposal and things are not looking good for the next ETF waiting approval.
However, what really caused the sharp drop is the fact that there have been unconfirmed reports that Goldman Sachs is backing off from setting up a cryptocurrency trading desk. This is mostly because of the murky regulatory future that Bitcoin is facing. According to sources, Goldman Sachs has lowered the priority for entering the cryptocurrency market, though the bank was vague in its statements.
Earlier this year, Goldman Sachs was very enthusiastic about entering the cryptocurrency market. CEO David Solomon was optimistic about it and said that the bank needed to adapt to the changing market but it appears that things have changed on that front for now.
Bitcoin Enthusiasts Holding On
Despite the drop in price, several bitcoin bulls are holding on to their coins at least until November. This is when Intercontinental Exchange, the same company that runs the New York Stock Exchange, plans to roll out a Bitcoin ETF as part of its Bakkt cryptocurrency platform.
Bitcoin’s drop in price cannot be solely blamed on investor paranoia. Some Bitcoin watchers point to popular bitcoin exchange ShapeShift introducing a registration process as another spark for the sell-off.
The price drop is worrying though. It has caused a drastic sell-off in other cryptocurrencies. Notably, Ethereum, EOS, Bitcoin Cash, and Ripple have reported a minimum of 10 percent loss in value since the drop of bitcoin’s value.
Other cryptocurrencies have followed always Bitcoin’s lead and the drop in price has put several of them in hot water. This is especially troubling for Ethereum since many of the ICO investors that bought into ICOs in 2017 are starting to sell this year.