Since November 8, within a 48-hour period, Basic Attention Token (BAT) lost 28 percent of its value following a high profile Coinbase listing.
On Friday, as CCN reported, BAT declined by around 20 percent against the US dollar. In the last 24 hours, BAT dropped by yet another eight percent, recording a 28 percent decline in value in a two-day span.
The substantial drop in the price of BAT follows the official integration of the digital asset by Coinbase, the largest fiat-to-crypto exchange in the global market.
Why BAT and ZRX Rose Significantly in the First Place
On November 3, Coinbase officially announced that BAT would be live on Coinbase Pro to be traded against USDC, the stablecoin co-issued by Coinbase and Circle.
Six days later, on November 9, the exchange disclosed that the integration of BAT into Coinbase.com and other products on the platform are complete.
“Starting today, Coinbase supports the Basic Attention Token (BAT) at Coinbase.com and in the Coinbase Android and iOS apps. Coinbase customers can now buy, sell, send, receive, or store BAT, along with Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin, ZRX and USDC.”
Upon the release of the positive announcement and the successful integration of BAT, the price of the digital asset sharply declined from $0.36 to $0.29, by around 19.5 percent. On the official opening day of BAT on the platform, the asset experienced one of its worst sell-offs in recent months.
The decline in the price of BAT was particularly abnormal because the integration of BAT by Coinbase meant that under the guideline set forth by the US Securities and Exchange Commission (SEC), BAT is not considered a security — at least in the view of the characteristically-cautious Coinbase.
In its initial announcement in May, the exchange emphasized that it will not integrate the five digital assets it has interest in that include Stellar, BAT, 0x, Zcash, and Cardano if it does not receive approval from local regulators.
“Unlike the ongoing process of adding Ethereum Classic, which is technically very similar to Ethereum, these assets will require additional exploratory work and we cannot guarantee they will be listed for trading. Furthermore, our listing process may result in some of these assets being listed solely for customers to buy and sell, without the ability to send or receive using a local wallet.”
The full integration of BAT into Coinbase.com, as well as 0x (ZRX), showed that the two tokens can be considered as non-securities under existing laws in the US.
Yet, both cryptocurrencies suffered a significant loss following the integration and nearly dropped back to the point before the integration of the two assets on the exchange was announced.
Buy the Rumor, Sell the News
The BAT and ZRX dump following their full Coinbase integrations demonstrate the typical buy the rumor and sell the news trend in the cryptocurrency market.
Prior to the integrations, the price of BAT and ZRX substantially increased and immediately after they concluded, the price of both digital assets plunged.
Especially in a bear market in which sell pressure is stronger than buy pressure, more investors will seek to profit off of short-term events.
Featured Image from Shutterstock. Charts from TradingView.