After the cryptocurrency market started to drop following the disappointing trading volumes of the new Hong Kong spot Bitcoin (BTC) exchange-traded fund (ETFs), things have been particularly bad for the related crypto asset, which has dipped to the area of $61,000 in a matter of minutes.
As it happens, the six Hong Kong ETFs with exposure in Bitcoin and Ethereum (ETH) have drastically missed market expectations on the first day of trading, with a combined trading volume of only $11 million, a fraction of the expected $125 million, as crypto market analyst WhaleWire noted on April 30.
According to the analyst, this isn’t a surprise, as WhaleWire highlighted the “simply made-up and nonexistent” institutional demand narrative, adding that the increase in Bitcoin prices over the last several months was the result of Tether (USDT) “injecting record amounts of fake money into the markets.”
Possible catastrophic lows
Meanwhile, senior analyst Nicholas Sciberras from research platform Collective Shift has pointed out the recent surprising meteoric rise in the price of the flagship decentralized finance (DeFi) asset, arguing that great highs are possible, but “so too are catastrophic lows,” according to a report on April 22.
In fact:
“There is a theory that the four-year halving event is not as significant as many think and that, instead, its alignment with external liquidity cycles is what makes it appear like a trigger for upward price movement.”
Furthermore, Sciberras highlighted concerns over Bitcoin’s long-term security, considering that the block reward will continue to decrease with each halving, as well as the short-term sell pressure and the view among developers that ‘inscriptions’ are nothing more than spam congesting the network.
He also warned about the “continued attacks on Bitcoin’s environmental impacts,” the increasing hostility towards crypto assets, the possibility of Europe reintroducing a ban on Proof-of-Work (PoW), and the implications of anti-money laundering (AML) and Know Your Customer (KYC) laws.
“If Bitcoin continues to be targeted by governments and its energy consumption is further politicized, then it could put pressure on Bitcoin’s long-term sustainability. (…) If there is lackluster adoption and demand for Bitcoin, or fee revenue is inadequate to incentivize miners to upgrade their hardware and mine new Bitcoins, security could decrease and threaten the network.”
It is also important to note that the crypto market is feeling the heat from a decline in US business activity, with the US S&P Global Composite Purchasing Managers’ Index (PMI) dropping to 50.9 in April, and Peter Schiff, Bitcoin’s vocal critic has warned of the asset’s price crash if it fails to stay above $60,000.
For now, Bitcoin is changing hands at the price of $61,142, which indicates a 2.33% decline in the last 24 hours, a drop of 7.47% across the previous seven days, and a loss of 13.20% accumulated on its monthly chart, while the total crypto market capitalization decreased by 3.06%, bleeding $70 billion in a single day, according to the latest data on April 30.
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