Bitcoin retreated on Wednesday, erasing almost all of its gains recorded in the first two days of the year, ahead of an important deadline when the U.S. Securities and Exchange Commission will decide whether it will approve exchange-traded funds that invest directly in Bitcoin.
The crypto BTCUSD,
fell 5.7% in the past 24 hours to $40,838 on Tuesday, after a rally on Tuesday propelled it above $45,000 to the highest level since April 2022, according to CoinDesk data . Bitcoin is up more than 150% in 2023, but the crypto is still more than 35% below its 2021 high.
Crypto market participants widely expect the SEC to approve a spot bitcoin ETF by January 10, according to which the agency must decide whether to approve the application filed by ARK Investment and 21 Shares.
However, some have different views. Markus Thielen, an analyst at Matrixport, wrote in a Tuesday note that he expects the SEC to deny all Bitcoin ETF applications this month because the applications may not meet the requirements that must be met.
Some blamed the report for triggering Bitcoin’s price decline on Wednesday. “Given the market was bullishly positioned with leverage, any rumor would trigger a leverage cascade,” Alliance Bernstein analysts Gautam Chhugani and Mahika Sapra wrote on Wednesday.
