Bitcoin drops after CFTC announcement

  •   02/10/2020 - 16h44
  •   HARMANT Adeline

Yesterday, Bitcoin experienced a dramatic drop in the market. Although this crypto-currency resisted KuCoin hacking, the announcement by the US regulator was enough to cause its loss. Bitcoin should nonetheless benefit from talks in the US Senate today with discussions on a plan developed by US financial geniuses and lawyers.

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Bitcoin drops after CFTC announcement

A fall of almost 4% in the stock market for Bitcoin:

During the session of Thursday, October 1, 2020, Bitcoin thus experienced a fall of nearly 4% and went from 10,900 dollars to 10,484 dollars in barely one hour. The CFTC's announcement has indeed triggered massive sales of BTC. This announcement indeed concerned a civil action against the Seychelles-based BitMEX exchange.

One will retain here the indictment of the CEO of BitMEX, Arthur Hayes and two other shareholders of the company namely Ben Dela and Samuel Reed, for having accepted 11 billion dollars of deposits, a very important part of which would come from American customers.

Since BitMEX has not registered with the CFTC, it has not been able to implement adequate anti-money laundering measures.

The exchange is supposed to block access to its services for US customers, but it is noted that 85,000 US accounts have already been opened on the platform by bypassing IP address blocking through a simple VPN.

 

Towards an upward recovery of Bitcoin after this decline?

If Bitcoin has lost many points because of this announcement, it does not mean that it cannot recover. This is indeed what analysts believe, as they indicate that the dollar could allow Bitcoin to resume a strong uptrend quickly. The dollar has been falling for four consecutive days and the effects of this decline are not yet showing on the price of Bitcoin.

On Wednesday; Treasury Secretary Steven Munich announced on Fox Business that any deal that comes out of the current Senate negotiations could involve the distribution of a new series of $1,200 checks for US citizens.

This situation could therefore theoretically benefit Bitcoin with investors who will turn away from the Forex market and the greenback to invest in crypto-currencies in order to protect themselves in the most effective way possible against the threat of high inflation of the greenback.

It remains to be seen whether this financial gift from the U.S. government will be enough to counter the CFTC threat to Bitcoin. If so, Bitcoin could then seriously resume its upward climb towards $12,000 following Steven Munich's intervention. Investors in Bitcoin are indeed particularly on the lookout for any announcement that could lead to a depreciation of the dollar.