After a stratospheric spring surge into the $200s, Bitcoin prices slumped to six-month lows of about $70 in early July, and have been now hovering around $90 for the past week.
That’s despite the double cannonball executed by the Winklevoss Twins last month with their creation of a Bitcoin ETF.
So what happened to the great Bitcoin renaissance?
We reached out to Alan Silbert, CEO of Bit BitPremier, for some guidance.
In short, it’s suffering from regulatory uncertainty and surging stocks.
I think potential buyers are sitting on the sidelines now while issues play out with Mt. Gox and the next exchanges to come online, regulatory developments, and companies deciding to shut down because of the regulatory burden. Meanwhile, I know that a bunch of activity is percolating in the background with new bitcoin startups taking shape. So I see it as a kind of transitional period right now. Plus the US equity markets keep hitting record highs and investor dollars are going there.
And here’s what he had to say about the Winklevoss Twins:
The Winklevoss ETF is going to have to go through a lengthy registration process with the SEC and also market to authorised participants to sign-on to the concept (might be telling you something you already know: large financial institutions that essentially make the market, oil the machine, and take some risk for the arbitrage opportunities). This will take a while and the ETF may not happen in the foreseeable future, especially if they can’t convince authorised participants to sign on, so it takes a lot of the kick out of the press release. The press has also been pretty negative on the Winklevoss ETF.
Bottom line: there’s a whole lot of uncertainty that has yet to play out before people decide to bet on Bitcoin in either direction.
For reference, the chart from Mt. Gox:
Here’s a long-term look at Bitcoin via ClarkMoody.com. The massive spike in the middle of the chart occurred in mid-April.
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