A VanEck Executive has given four possible reasons why the price of Bitcoin dropped to $6500 mark.

Gabor Gurbacs, the digital asset director at investment management firm VanEck has pointed out four reasons behind Bitcoin drop and says that the decrease in the value of the coin is the result of financial and geopolitical factors.

The News Spy


Top Rated Robot

80% Claimed Win-rate$250 DepositAccepts Credit Card Trade NowRead Full Review

He highlighted these reasons in a tweet and said that these factors may have caused a decline in the price of Bitcoin.

Followings are these four reasons:

ALSO READ  Threat to Bitcoin as the US Treasury Department is Devising Strict Regulation Policies for Cryptocurrency

1) China is cracking down on Crypto exchanges

He said one of the reasons behind this drop is that the Chinese government is cracking down all the crypto exchanges in the country. Recently, China has shut down 173 crypto exchanges and token issuing platforms.

These exchanges were offering their bitcoin services and now investors have pulled back from these exchanges. During his other post, he said:

I think investors are worried about China crackdown news and hence some second guess their re-entry point and lower prices.

2) 2019 year-end tax-loss arbitrage

Tax reporting arbitrage might be another reason behind this BTC drop.

The US investors might be forcing the markets to drive lower so that they could record a negative performance on their holdings for 2019 year-end tax-loss arbitrage.

3) Generally lower liquidity

Gabor Gurbacs said that the liquidity on Bitcoin trading is facing a squeeze. He said that the Bitcoin liquidity is evaporating fast and advised to remain to be careful because the market can snap fast in any direction. As he said:

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.

4) Product development is funded with Crypto

The last reason he highlighted that might have forced bitcoin’s price to lower is that lots of recent product development and mergers and acquisitions (M&A) may be funded with cryptocurrency.

ALSO READ  Brazil Put Crypto Exchanges in Tough Condition: Forcing Them to Stop Working With New Tax Law

So these are the four possible reasons that VanEck executive Gabor Gurbacs has highlighted behind BTC price drop to $6.5k.


Please enter your comment!
Please enter your name here