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On Wednesday, Bitcoin experienced a sharp decline, nearly wiping out all the gains made earlier this year, reversing the long-term upward trend of Bitcoin during periods of underperformance in traditional assets globally.
Data shows that the world's largest token fell by 9.2% at one point, dropping below $41,000. The day before, this digital asset had surpassed the $45,000 mark, setting a 21-month high. The price volatility on Wednesday was the largest in over two months. At the time of writing, Bitcoin has narrowed its decline, hovering below $43,000. This volatility also affected cryptocurrency-related stocks, with the share price of the U.S. cryptocurrency exchange Coinbase (COIN.US) briefly falling by 8.1% before recovering.
Bartosz Lipiński, the CEO of cryptocurrency trading platform Cube.Exchange, stated, "The prospects of whether the U.S. Securities and Exchange Commission (SEC) will approve a Bitcoin spot ETF are intensifying market fluctuations. The market is a bit overbought."
According to Coinglass data, in the last 24 hours, the cumulative amount of liquidations in the cryptocurrency market exceeded $600 million, marking the largest liquidation amount since December 11th of the previous year. The number of liquidated accounts approached 176,000. Within one hour, the entire cryptocurrency market saw a liquidation of $492 million in futures contracts, with long positions liquidated amounting to $468 million.
Until recently, Bitcoin had been surging in anticipation of the upcoming deadline on January 10th (when the SEC might approve the first ETF directly linked to the spot price of Bitcoin). The value of cryptocurrencies rose nearly 160% in 2023, and the wealth of digital assets saw a more widespread rebound.
In recent days, several issuers have submitted applications for designated authorized participants for their potential Bitcoin-related products, indicating that these funds may soon be approved. Broker-dealers designated as authorized participants include Wall Street heavyweights Jane Street Capital and JPMorgan.
However, Matrixport analyst Markus Thielen stated in a report on Wednesday that he expects the SEC to reject all Bitcoin ETF proposals this month. Thielen suggests that recent applications still do not meet the requirements necessary for SEC approval. Some market observers predict that if the SEC rejects these proposals, issuers may take certain measures against the regulatory agency.
Other digital assets also experienced synchronous declines with Bitcoin. On Wednesday, Ethereum fell by 11%, and Solana's SOL dropped by over 28%, although both later narrowed their declines.
Fadi Aboualfa, Research Director at cryptocurrency custody company Copper Technologies Ltd., stated in an email, As we enter a new year with a lot of uncertainty, the market begins to assess the risks of all asset classes, and we may see increased volatility in the short term. However, regardless, we saw a similar decline in the market in early December last year, followed by further rebounding. |
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Post time 9-1-2024 12:26:08