Weekly roundup of bitcoin news
Bitcoin dropped to a five-month low this week. The movement has panicked some participants in crypto markets, but the latest losses are largely explicable by reference to recent events.
Firstly, the Bitcoin mining crackdown in China has devastated the market in the past several weeks. Many mining companies have had to cut back their activities. However, these companies are still operating from different sites all over the world. The drop in hashrate is temporary with normality likely to return soon as miners adapt logistically to recent events.
Finally, Grayscale Bitcoin Trust (GBTC)’s unlocking has frightened many investors. GBTC is not an ETF that will let people sell their positions, but unlocking is like unlocking shares of a pool of funds. However, if many people liquidate their positions, there is a risk that Grayscale will need to ask for permission from the SEC to liquidate. Grayscale holds approximately 3% of the total supply of Bitcoin, more than 650,000 BTC.