“Why did the cryptocurrency market drop today?”
The cryptocurrency market experienced a decline today, resulting in long-term liquidations exceeding $160 million amid concerns that the Securities and Exchange Commission (SEC) may delay decisions on all pending immediate requests from Bitcoin (BTC) exchange-traded funds (ETFs).
Price movements across the cryptocurrency market continue to trend negatively as investors and fund managers begin to assess the potential ramifications if the SEC chooses to delay current immediate Bitcoin ETF requests.
Intensive selling of XRP and alternative currencies followed the submission of a fake filing to exchange-traded funds. The drop in the cryptocurrency market comes during a week expected to see the SEC review a few ETF requests. Notably, the SEC must make decisions on requests from the exchange-traded funds Hashdex and Global X by November 17. Additionally, the SEC will also need to decide on Franklin Templeton’s Bitcoin ETF request by November 21, and failure to do so would result in a postponement to 2024.
According to James Edwards, a cryptocurrency analyst at the Australian financial technology company Finder, the situation in the XRP markets may contribute to sending a request for investigation to the US Department of Justice. The analyst mentioned that the fake BlackRock XRP trust filing resulted in a pushback and is believed to hinder the immediate launch of a Bitcoin ETF in the US, as it supports the SEC’s claims of price manipulation in the cryptocurrency industry.
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At present, traders are likely to profit from the current high prices in the cryptocurrency market due to this potential prolonged wait. It is likely that the excitement for exchange-traded funds in ETH and BTC may diminish. BlackRock does not believe the SEC has any valid reason to not approve the requests, but it appears unlikely as the market was gearing up for the approval of the exchange-traded fund by November 17, a scenario that now seems improbable as the SEC seems poised for a delay.
On November 15, the SEC postponed the decision on the Grayscale Ethereum Futures Traded Trust. Futures liquidations have led to a decline in the cryptocurrency market. The drop in major cryptocurrencies led to a surge in liquidations across the derivatives market. In the past 24 hours alone, over $160 million worth of long positions were liquidated in the cryptocurrency market, with $144.3 million liquidated in the past 12 hours. Cryptocurrency market prices are adversely affected when long derivative positions are liquidated without buying pressure from trading volumes.
Despite the decline in the cryptocurrency market today, some alternative currencies performed well. In the short term, the cryptocurrency market will continue to face multifaceted challenges, and there is no doubt that economic and regulatory factors will shape its future trajectory.
Disclaimer: The information provided is not financial advice. Chinwa.tech does not take any responsibility for investments made based on the information provided in this article. We recommend consulting a qualified specialist or financial advisor before making any investment decisions.
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