BITCOIN FALLS EVEN AS FIDELITY MOVES INTO CRYPTOCURRENCIES
Late last year, the price of bitcoin rose after CME Group and CBOE Global Markets launched bitcoin futures. Traders pegged their hope on institutional investors with the belief that Wall Street would increase the demand for bitcoin, which would lead to a higher price.
Since then, the price of bitcoin has fallen by more than half. In December, the price rose to more than $19,000. Today, bitcoin is selling for $7650. This could be because Wall Street did not bring the demand the traders expected. It could also be because most Wall Street traders placed short bets on the cryptocurrency.
Yesterday, a report by Business Insider showed that Fidelity Investments is plotting a move into the crypto space. Fidelity is one of the largest wealth managers in the world with more than $2.4 trillion in assets under management. The company has more than 26 million customers. While this should have been good news for bitcoin, the price declined yesterday.
Other major news came from the SEC Chair, Jay Clayton, who said that the commission would not designate bitcoin as a security. He argued that the cryptocurrency could not qualify as a security because it is meant to replace fiat currencies. However, he said that Initial Coin Offerings (ICOs) were likely securities because investors buy them with the hope that their token prices will rise.
Bitcoin has fallen from a high of $9712 at the beginning of May and is currently trading at $7630. As shown below, the BTC/USD pair has formed a symmetrical triangle pattern and is trading slightly above the 30 and 60-day moving average. Its commodity channel index indicator is currently at an overbought level in the 4-hour chart. This means, that the pair could resume the downward momentum.