If the crypto community is in the dress rehearsal period for a spot ETF approval, then Wednesday definitely saw some jitters enter the market.<\/p>\n
Bitcoin<\/a>‘s price dropped from a morning high of around $45,000 right down to around $40,500 before recovering to $42,400.<\/p>\n The 8% drop marks one of the steepest falls since BTC began an upward momentum in October last year and wiped out more than $500m in long positions liquidated as the price dropped.<\/p>\n Open interest also took a $2 billion hit, with traders minimizing their exposure on both long and short positions.<\/p>\n It’s possible that fears over the long-mooted spot Bitcoin ETF<\/a> drove the dump, with analysts predicting everything from multiple ETF applications being approved by the Securities and Exchange Commission<\/a> (SEC) this week, approved on January 10<\/a>, or simply rejected.<\/p>\n A report by Matrixport rebuffed the idea that spot ETFs are arriving in January.<\/p>\n The crypto investment service provider said late on Tuesday<\/a>:<\/p>\n While we have seen frequent meetings between the ETF applicants and staff from the SEC, which resulted in the applicants refiling their applications, we believe all applications fall short of a critical requirement that must be met before the SEC approves.<\/p>\n <\/p>\n This might be fulfilled by Q2 2024, but we expect the SEC The research team at Matrixport added:<\/p>\n If there is any denial by the SEC, we could see cascading liquidations as we expect most of the $5.1 billion in additional perpetual long Bitcoin futures to be unwound.<\/p>\n <\/p>\n We could see Bitcoin prices declining by -20% very quickly and falling back to the $36,000\/$38,000 range.<\/p><\/blockquote>\n However, the firm ultimately remains bullish on Bitcoin, adding: “Even if the SEC would deny the ETF, we still expect Bitcoin prices to be higher by the end of 2024 than when they started the year ($42,000), as US election years and Bitcoin mining years tend to be positive.”<\/p>\n READ MORE:<\/strong><\/p>\n Not everyone agreed with Matrixport’s verdict, with Bloomberg Senior ETF analyst Erc Balchunas saying, “We have heard nothing to indicate anything but approval.”<\/p>\n JUST IN: Bloomberg Senior ETF Analyst Eric Balchunas says "we have heard nothing to indicate anything but approval" pic.twitter.com\/kqQZ4poGvf<\/a><\/p>\n — Bitcoin Magazine (@BitcoinMagazine) January 3, 2024<\/a><\/p><\/blockquote>\n
\nto reject all proposals in January.<\/p><\/blockquote>\n\n
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