Bitcoin fell 8% on Wednesday as market jitters began over the anticipated approval of a spot Bitcoin (BTC) ETF.
The meltdown overshadowed the entire rally that occurred on January 1, leading to the liquidation of $500 million worth of positions on derivatives exchanges.
“The ETF’s passage looks increasingly unlikely and the market remains in a tailspin,” options analyst GreekLive wrote on X. Weakness in crypto mining stocks, and selling in many crypto-related US stocks also prevailed. Doubts of the market.”
Last week, Reuters reported, citing sources, that a Bitcoin ETF could be approved as soon as “Tuesday or Wednesday.”
Financial services firm Matrixport played down optimistic expectations, saying: “We believe all applications fall short of a critical requirement that must be met prior to SEC approval. This could be completed by the second quarter of 2024.” , but we expect the SEC to reject all proposals in January.”
After a morning high of $45,500, Bitcoin fell to a low of $40,550 before bouncing back to $42,200. Open interest declined by $2 billion due to liquidations, the declining value of BTC, and traders reducing risk on both the long and short sides.