Investing.com - Cryptocurrency prices have turned down over the past seven days, after further signs of waning demand for virtual currency assets and fresh evidence of the struggle it faces to break into the financial mainstream.
A symbol of the decline in interest for Bitcoin came this week when cryptocurrency mining equipment producer Bitmain let its application for a Hong Kong initial public offering lapse, due to a drop in demand for mining products.
"We do recognize that despite the huge potential of the cryptocurrency and blockchain industry, it remains a relatively young industry which is proving its value," the company said on its website.
Bitmain designs microchips that are used for mining cryptocurrencies. The industry has been hit hard as price declines have made it difficult to justify the costs of mining.
"We hope regulatory authorities, media, and the general public can be more inclusive to this young industry," Bitmain said.
It may be hoping for a while yet, judging by the noise around a listing application from VanEck and SolidX for an exchange-traded fund.
The Securities and Exchange Commission has received mostly negative comments in a consultation on whether to approve the listing. The majority of comments urged the regulator not to approve the proposal, with many claiming concerns that Bitcoin is subject to manipulation.
The SEC is expected to decide on two ETF proposals in the near future: the VanEck project is the one viewed as the most likely to be approved.
Earlier in the month, SEC chairman Jay Clayton told Fox Business that there “may be a case where a Bitcoin ETF could satisfy our rules” but declined to comment on the specifics of either proposal.
The SEC will hardly have been encouraged by a new study - by trading analytics platform The Tie - suggesting that trading volumes on crypto exchanges could be false.
“In total we estimated that 87% of exchanges reported trading volume was potentially suspicious and that 75% of exchanges had some form of suspicious activity occurring on them,” The Tie said about its findings on Twitter.
“If each exchange averaged the volume per visit of CoinbasePro, Gemini, Poloniex, Binance, and Kraken, we would expect the real trading volume among the largest 100 exchanges to equal $2.1 (billion) per day. Currently that number is being reported as $15.9 (billion),” the company added.
It isn’t the first report to claim that exchanges exaggerate reported trading volumes. Crypto asset manager Bitwise claimed in a report on Friday that 95% of reported volume is fake on digital exchanges, while the Blockchain Transparency Institute wrote a report with similar findings in December 2018.
Bitcoin has fallen 2% over the week to $3,932.60 on the Investing.com Index. Ethereum was down 3.4% to $134.21 and XRP slumped 4.7% to $0.30019 while Litecoin slipped 2.2% to $58.70.
The combined market cap of cryptocurrencies fell to $138 billion at the time of writing, from $140 billion a week ago.