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Bitcoin Slumps as $400M Liquidated in Two Hours
Financial services company Matrixport said it expects the SEC to reject all ETFs applications this month.
Updated Mar 8, 2024, 7:19 p.m. Published Jan 3, 2024, 12:41 p.m.
Bitcoin slid 8% on Wednesday as jitters around the anticipated approval of a spot bitcon [BTC] ETF began to enter the market.
The slump retraced the entire upside move that occurred on Jan. 1, spurring the liquidation of $500 million worth of positions across derivatives exchanges.
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"The likelihood of the ETF's passage became less and less likely, and the market saw a stalemate," options analyst GreeksLive wrote on X. "Weakness in crypto mining stocks, and the sell-off in several crypto-related U.S. stocks, also reinforced the market's skepticism."
Last week, Retuers reported that a bitcoin ETF could be approved as soon as "Tuesday or Wednesday," citing sources.
Financial services firm Matrixport rebuffed optimistic expectations, saying: "We believe all applications fall short of a critical requirement that must be met before the SEC approves. This might be fulfilled by Q2 2024, but we expect the SEC to reject all proposals in January."
Following a morning high of $45,500, bitcoin dropped to as low as $40,550 before bouncing back to $42,200. Open interest fell by $2 billion due to liquidations, the dwindling value of BTC and traders reducing exposure on both the long and short side.
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Coinbase Sees Crypto Recovery Ahead as Liquidity Improves and Fed Rate Cut Odds Climb
The crypto exchange also took note of a so-called AI bubble that continues to go strong and a weaker U.S. dollar.
What to know:
- Coinbase Institutional is seeing a potential December recovery in crypto, citing improving liquidity and a shift in macroeconomic conditions that could favor risk assets like bitcoin.
- The firm's optimism is driven by rising odds of Federal Reserve rate cuts, with markets pricing in a 93% chance easing next week, and improving liquidity conditions.
- Several recent institutional developments, including Vanguard's crypto ETF policy reversal and Bank of America's greenlighting of crypto allocations, have contributed to bitcoin's rebound from recent lows.
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