The Bank of International Settlements has discovered that, just as in stock and bond markets, “bad” news can have a negative effect on bitcoin (BTC), specifically news related to regulation.
“While cryptocurrencies are often thought to operate out of the reach of national regulation, in fact their valuations, transaction volumes and user bases react substantially to news about regulatory actions,” according to the BIS report.
The report includes this example: when the U.S. Securities and Exchange Commission would not approve a proposal from investors Cameron and Tyler Winklevoss to create an exchange-traded fund to buy and sell bitcoin.
“In the five minutes around the announcement, the price of bitcoin dropped by 16 [percent],” according to the report.