The US Security and Exchange Commission (SEC) has decided to postpone a decision regarding a bitcoin-backed exchange traded fund (ETF), according to an August 7 press release.
The proposal, this time filed by Cboe BZX Exchange, Inc, is one of several filed by the traditional stock exchange, investment firm VanEck and blockchain company SolidX, and/or the Winklevoss twins. So far, no attempts have been approved by the SEC.
The postponement of the ruling received a lot of attention from news outlets – not only because of the actual decision, but because the price drop of many cryptocurrencies seemed to coincide with the SEC's announcement.
While it is true that after the decision was announced the price of bitcoin has dropped more than $700 in the last two days and that the price of Ether has followed a similar trajectory, according to CoinMarketCap, it may have little to do with the SEC's decision to postpone this ruling, and it's far from certain that the market will see long-term losses.
After the Winklevoss brothers were denied on July 26, 2018, the price of bitcoin did fall precipitously, but by the start of business the very next day, it was back up to near where it was before the ETF announcement.
Traders and journalists alike were quick to blame a research paper released on June 13 of this year for another drop in the price of bitcoin. The paper had posited that actors associated with Bitfinex had been using Tether to manipulate the price of bitcoin on the exchange. What many failed to notice was that the price had been plunging for several days before that. On June 9, the price peaked above $7,600. The June 10 high was $300 lower. And June 11 never got above $6,900. By July 24, however, it was ancient history, with the price above $8,000.
The price of cryptocurrency is volatile and ever-changing. While certain actions by regulators, exchanges, and even universities can make investors nervous, price drops and elevations cannot be blamed on individual events, comments, or announcements. Because crypto can bounce back as soon as the very next day. Cryptocurrency investors should be mindful of the present, but should also realize that the sun will most likely come out tomorrow.