After fighting to hold $20,000 on Wednesday, buyer support for bitcoin (BTC-USD) collapsed Thursday morning, with bitcoin falling over 5% to trade as low as $18,930.
This latest decline has seen bitcoin lose more than 37% in June — its worst month since since December 2018.
Thursday's drop comes after the SEC sent rejection letters for ETFs proposed by both Grayscale and Bitwise, while continued inflation fears also weigh on sentiment in the broader crypto market.
Like bitcoin, sell-offs continued for other cryptocurrencies Thursday morning. Binance's BNB token (BNB-USD) down 4%, Solana (SOL-USD), down more than 6%, Cardano’s ADA token (ADA-USD), down more than 4%, Chainlink (LINK-USD), down 3%, have all seen losses on the day.
Grayscale ETF rejection and lawsuit
The SEC's rejection of Grayscale's proposed ETF was a key factor dragging down crypto markets early Thursday.
"The next few months for crypto are going to be very telling," Grayscale CEO Michael Sonnenshein told Yahoo Finance Live on Thursday.
As Yahoo Finance previously reported, Grayscale had sought approval from the SEC to convert GBTC into an exchange traded fund (ETF) that holds bitcoin and relies on “authorized participants” to continuously redeem and create shares could close this discount.
On Monday, Grayscale attempted to show regulators an ETF would be operationally viable, announcing Wall Street firms Jane Street and Virtu Finance had agreed to fill the authorized participant role as long as Grayscale received approval from the SEC.
As the SEC showed in its filing on Wednesday, the regulator continues to harbor concerns that “the price of bitcoin is subject to manipulation on unregulated platforms” and the approval could invite additional manipulation.
As of midday Thursday, GBTC was trading hands at around $12.25 per share, a roughly 30% discount to the per-share value of the trust's bitcoin holdings. With ETF conversation, Grayscale had sought to close this gap between the market price and the trust's net asset value.
David Hollerith covers cryptocurrency for Yahoo Finance. Follow him @dshollers.