Bitcoin slumps as $400M liquidated in two hours. Financial services company Matrixport said it expects the SEC to reject all ETFs applications this month.
On Wednesday, Bitcoin experienced an 8% slide as concerns about the potential approval of a spot Bitcoin (BTC) ETF started to impact the market. This decline erased the entire gain that occurred on Jan. 1 and led to the liquidation of $500 million in positions on derivatives exchanges.
The chances of the ETF being passed decreased and the market reached a stalemate, according to options analyst GreeksLive. The skepticism in the market was reinforced by the weakness in crypto mining stocks and the sell-off in several crypto-related U.S. stocks.
Reuters reported last week that a bitcoin ETF could potentially be approved by the SEC as early as Tuesday or Wednesday, according to sources. However, financial services firm Matrixport dismissed these hopeful expectations, stating that they believe all applications currently fall short of a critical requirement necessary for SEC approval. They anticipate that this requirement may not be met until Q2 2024, and they expect the SEC to reject all proposals in January.