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<p>The Winklevoss twins.</p>

Bitcoin Drops as U.S. Rejects Winklevoss ETF for Cboe Trading

The SEC said the Cboe Global Markets Inc. platform that would have listed the Bitcoin fund failed to prove that the underlying market was “resistant to manipulation.”

By Todd White

(Bloomberg) --Bitcoin fell for a third day, slipping below $8,000, after the U.S. Securities and Exchange Commission rejected a request to list an exchange-traded fund run by Tyler and Cameron Winklevoss.

The declines have halted Bitcoin’s July rally, which had powered up the world’s biggest cryptocurrency by more than 30 percent after its plunge earlier this year while buoying sentiment across the digital-coin market.

On Thursday, the U.S. again turned down the Winklevoss ETF, saying the Cboe Global Markets Inc. platform that would have listed the Bitcoin fund failed to prove that the underlying market was “resistant to manipulation.”

The drop also coincided with a signal of lost momentum that some traders consider to be bearish, the first such indication since the token’s historic surge in December.

“Some would certainly argue this is bearish,” said Craig Erlam, senior market analyst at online trading firm Oanda Corp. in London. “This ‘overbought’ condition becomes a bearish signal when a new high in price does not coincide with a new high in the RSI,” for Bitcoin.

Bitcoin fell 2.7 percent to $7,921 Friday, and the momentum indicator known as the relative-strength index dropped back into its ordinary range, according to Bitstamp prices compiled by Bloomberg. Bitcoin is down more than 40 percent this year, hitting a low on June 29.

The virtual currency had been rising recently in part on speculation that the SEC would sign off on an ETF. The regulator’s decision is a setback for digital-currency enthusiasts, because an ETF would have opened up the market to mutual funds and other institutional investors that are restricted from trading the token.

“These corrections are normal,” said Erlam. “I haven’t seen enough to say it’s topped yet.”

 
--With assistance from Ben Bain, Eric Lam and Sid Verma.To contact the reporter on this story: Todd White in Madrid at [email protected] To contact the editors responsible for this story: Samuel Potter at [email protected] Sam Mamudi, Timothy Sifert

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