Bitcoin Crash Alert: Will the SEC Decision Trigger a Massive Drop?

Despite facing a sharp decline on Wednesday, wiping away most of its early 2021 gains, Bitcoin is showing resilience -especially in comparison to the recent movements on the Nasdaq. In light of the Securities & Exchange Commission’s (SEC) imminent decision on a proposed Bitcoin Exchange-Traded Fund, Fadi Aboualfa, head of research at crypto custodian Copper Technologies warned of increased volatility in the short-term. Discussing the issue on Bloomberg Technology, Aboualfa noted that the crypto landscape has shifted to considers when the approval may arrive, rather than the mere possibility of it a year ago. Present in these conversations is the expectation that Bitcoin could drop to $37,000 or a possibly $27,000 due to a ‘mean reorganization’. He also examined the hedge Bitcoin has become to a tech stock over the last few months linked inversely to traditional markets.

Despite a climate whereby inflows may rocket after a spot Bitcoin ETF is indicated, Aboualfa expressed that crypto markets are still leveraging speculation. Consequently, to mitigate high risk investments he encourages astute wise investment, advising traders to understand if their needs are of a short-term to create volatility or for a secure increase dive-term influx results.