Bitcoin’s value dipped below $22,000 on Thursday, with a decline of 4% in the last 24 hours, following the announcement that Kraken, a major cryptocurrency exchange, will be closing down its staking operations for U.S. customers. The shutdown was prompted by a settlement with the U.S. Securities and Exchange Commission (SEC), which demanded a payment of $30 million from Kraken for providing unregistered securities. The market decline also affected Ether (ETH), the second-largest cryptocurrency, which saw a drop of 4.3% to $1,569. The crypto-related stocks were also impacted, with Coinbase experiencing a 14% decrease during Thursday’s midday trading, and bitcoin miner Marathon Digital Holdings (MARA) falling 13%. This came after a tweet by Coinbase CEO Brian Armstrong, who claimed that the company had heard rumors that the SEC wanted to eliminate crypto staking for U.S. retail customers.
Opinions on the future of Bitcoin are divided among analysts, with some predicting a retreat to the $20,000 support in the near future, while others believe that the current slowdown will be short-lived, leading to another price surge like previous trends. Some experts believe that the market has entered an accumulation phase that could fuel a future bull run. Coinglass, a crypto data platform, reported that investors have liquidated $90 million in BTC long positions compared to $42 million in short positions over the past seven days, indicating a stagnant market in the near term.
However, recent market indicators, such as the transfer of large amounts of BTC from centralized exchanges to self-custodial wallets, and the growth in daily active addresses and transactions, suggest a potential market bottom and long-term investor confidence, according to a quarterly report by Messari. Although the excitement surrounding Bitcoin has diminished, the network has a history of regaining popularity after periods of uncertainty, as noted by Sami Kassab and Chris Collar in the Messari report.