Bitcoin (BTC) dropped below $7,000 this morning (More than $300 in an hour) and many are panicking on the prospects. Of course, most altcoins also fell sharply with Ethereum (ETC) plunging near the $250 mark and all of this really happened in the span on an hour. Total crypto market capitalization is around $222 billion at press time, down from yesterday’s high of $240 billion.
Many across Twitter were left wondering why the price dropped so suddenly and the downward action remained a mystery as many speculated on whale manipulation.
Of course, one of the most popular theories is that the decline rested with the decision by Goldman Sachs to hold off on a cryptocurrency trading desk. However, per the sources, the banking giant hasn’t abandoned the idea completely, but is rather pushing the possibility lower down on its priorities list and could still move to open the desk at a later date.
Business Insider reported:
“Goldman has moved plans to open a desk for trading cryptocurrencies further down a list of priorities for how it can participate in cryptocurrency markets, according to people familiar with the matter.”
This bit of sour news is a bit of an about-face for Goldman as the incoming Chief Executive David Solomon talked about modernizing the Wall Street giant by advancing its bitcoin and cryptocurrency services, but obviously this is up in the air.
Another theory of the sell-off had to do with Shapeshift soon to be requiring customers to create an account, which it did not require previously.
Something else to consider, Bitcoin days destroyed (BDD) has continued to decline, suggesting that long term holders are keeping funds dormant in cold storage. BDD is a measure of long term holding and coin dormancy, can be used to analyze early adopters cashing out or moving coins between wallets. For example, if someone has 10BTC that they received 10 days ago and then they spend it, 100 bitcoin days have been destroyed. BDD increased slightly in August, potentially related to an old wallet associated with Mt. Gox and Silk Road which recently moved 111,000 BTC, some of which has ended up on Bitfinex and Binance.