4 Possible Reasons Bitcoin Dropped to $6.5K, According to VanEck Exec
Bitcoin (BTC) price’s decline has come as a result of geopolitical and financial factors, a senior investment executive has suggested.
In a tweet on Nov. 25, Gabor Gurbacs, digital asset director at investment management giant VanEck, highlighted several causes which, he says, “may” have forced Bitcoin to lows of $6,500.
His findings chime with general sentiment over Bitcoin price, which recovered around 11% on Monday to linger around $7,200 at press time.
China’s publicity war on cryptocurrency
Specifically, investors saw the risk and opted to exit the market, hoping to buy back in at lower levels.
“I think investors are worried about China crackdown news and hence some second guess their re-entry point and lower prices,” he said in another post.
Tax reporting arbitrage
In the United States, investors may be attempting to drive the market lower in order to record small or even negative gains on their holdings for 2019.
Described by Gurbacs as “year-end tax-loss arbitrage,” it remains uncertain how much participation would be needed to move the market as much as it did in the past week.
Bitcoin liquidity “evaporating fast”
According to Gurbacs, who cited data from Skew Markets, liquidity on Bitcoin trading platforms is facing a significant squeeze.
This was also a likely product of concern over China’s policy, he added, something which has traditionally impacted sentiment.
“Bid-offer spreads widest in the past 3 months. Be careful out there. Market can snap fast any direction. Ease into positions. Avoid large/any market orders,” Gurbacs advised.
A further price trigger may have come in the form of product development and mergers and acquisitions, he said, with “many” recent examples funded with cryptocurrency.