The crypto exchange had a downturn following Iran missile and drone attack on Israel.The free fall was noticed especially in the market of Bitcoin. It sparked a debate over the challenges of digital currencies investments, among others liquidity when the US investors cannot trade Bitcoin at this time.
Peter Schiff highlights Bitcoin ETF low trading volume concern over geopolitical tensions
A matter that arose last week during a question by an American stockbroker Peter Schiff brought to the fore a fundamental problem concerning Bitcoin through exchange-traded funds (ETFs).
Schiff focused on the agony of investors who have no option to react to the market news over night moves of the market deterioration and high risk because of thin volume observed exclusively within the US market hours.
the price of Bitcoin tumbled more than 5% when the news of the geopolitical tension came out, but then it came back to life showing signs of recovery. Being the cryptocurrency economic climate highly volatile, Bitcoin gained the upper hand, and byweekend, its cost had gone above $64,000.
At the moment, there is reaction that is not so strong on the rise. Bitcoin is trading slightly at $66,447 and as a result it has increased in the last day by 3.29%. Cryptocurrency had showed a positive growth with 0.7% gain in seven day period. On the last month it has declined by over 4%.
Source: coin market cap
Analysis of Bitcoin’s vulnerabilities
Schiff’s statement depicted the susceptibility of the dealings regarding Bitcoin investments, especially with an aim of ETF, to the time crunch during market volatility. The inability to liquidate assets outside US trading hours exposes investors to overnight crashes without the means to take protective measures.
The inability to liquidate assets outside US trading hours exposes investors to overnight crashes without the means to take protective measures Schiff’s commentary applies to the dilemma of US investors when they could not use traditional methods to protect their wealth during the absence of the market, which caused panic sell-off.
The decisions to wait until open of US markets shows a very bad position for investors as they have no cure to immediate losses from position and also have no leverage to maximize profits if there is any.
The importance of timely action
in the cryptocurrency market which sometimes savagely moves. Prices of oil are always vulnerable to high fluctuations on sudden changes of geopolitical events and other external factors. Meanwhile, investors must be able to utilize their techniques of managing the risk to protect their investments.
Geopolitical tussles have just triggered the latest wave of crypto market selloffs whereby ETF investors are facing additional challenges in contrast to those who direct hold Bitcoin in their cryptocurrency wallets.
On the other side, lack of liquidity in the global markets on the US timeframe overnight results in shock in the morning, and, predictably, negative impact on investors’ portfolios.
With the increasing fluctuations experienced in Bitcoin and the rest of the cryptos, investors are expected to be constantly prepared and alert so as to timely adapt to sudden market movements.
