Bitcoin Plummets: $400M Liquidation in Just Two Hours

• Bitcoin Experiences 8% Dip Amidst Uncertainty Over Approaching Spot Bitcoin ETF Approval
• Market Skepticism on Bitcoin ETF
• The Predicted Approval of Bitcoin ETF
• Matrixport's Take on the Bitcoin ETF Approval
• Daily Bitcoin Performance

Bitcoin Experiences 8% Dip Amidst Uncertainty Over Approaching Spot Bitcoin ETF Approval

The value of Bitcoin$42,260 -0.64% dropped by 8% on Wednesday, a reaction to the market's uncertainty surrounding the imminent approval of a spot Bitcoin (BTC) ETF. This decrease saw Bitcoin giving up all its gains attained on the first day of the year, leading to the liquidation of positions worth $500 million across various derivative exchanges.

Market Skepticism on Bitcoin ETF

The market's hope for the ETF's approval seems to be dwindling, resulting in a deadlock. This negative sentiment was further compounded by the underperformance of cryptocurrency mining stocks and a drop in numerous crypto-related U.S. stocks.

The Predicted Approval of Bitcoin ETF

Last week, it was reported that a Bitcoin ETF could potentially receive approval as early as Tuesday or Wednesday. This speculation, however, was met with much skepticism.

Matrixport's Take on the Bitcoin ETF Approval

Matrixport, a renowned financial services company, expressed its doubts on the impending approvals. The firm stated, 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.

Daily Bitcoin Performance

After reaching a morning high of $45,500, Bitcoin fell to a low of $40,550 before regaining some value to settle around $42,200. This was compounded by a $2 billion drop in open interest due to liquidations, the dwindling value of BTC, and traders curtailing exposure on both the long and short side.

Edited by Jonathan Stoker