Bitcoin Edges Lower as Traders Await SEC Bitcoin ETF Move

01/05/2024 23:01

(Bloomberg) -- Bitcoin stumbled as traders braced for an upcoming decision by the US Securities and Exchange Commission on whether to approve an exchange-traded fund tied directly to the world’s largest cryptocurrency.Most Read from BloombergBusiness Insider Says Ackman’s Wife Plagiarized Doctoral ThesisHuawei Teardown Shows 5nm Chip Made in Taiwan, Not ChinaTroubled China Shadow Bank Zhongzhi Files for BankruptcyIslamic State Claims Responsibility for Deadly Iran BlastsJust a Billion Doesn’t Cu

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The token fell as much as 4.3% to $42,563 in New York on Friday, before paring the decline. Bitcoin had risen as high as $45,911 earlier this week, but crashed more than 9% on Wednesday as leverage built up in the market and investors grew nervous about the SEC’s impending decision. Other cryptoassets generally fared worst, with Ether, Solana’s SOL and Ripple’s XRP all down between 2% and 7%.

“People are quite antsy and market is pretty indecisive and moving around on at any headline,” said Zaheer Ebtikar, founder of crypto fund Split Capital.

The SEC has until Jan. 10 to approve or reject applications by major asset managers including BlackRock Inc. and Fidelity to launch an ETF tied to the digital asset. Bloomberg Intelligence analysts expect a decision could come as soon as Jan. 8, forecasting a 90% chance that all applications will be approved.

Some market observers had predicted that the SEC would greenlight the ETF applications as early as the start of this week. Other prognosticators have said Friday is the likely date. The speculation over when the SEC may weigh in has added to the volatility over the past few days, traders said.

“The purge of leverage and the growing possibility of a delayed approval, which has now influenced the mindset of some investors and traders, have led to a more cautious approach, contributing to the subdued price action of the last 24 hours,” said Jacob Joseph, research analyst at CCData, in an email late on Thursday. “While it still seems likely that a spot Bitcoin ETF will be approved in the coming days, any delay contrary to the market consensus is likely to result in a larger drawdown for digital assets.”

Read more: Bitcoin Resumes Ascent With ETF Approval Expectations Recovering

Elsewhere, global markets were mixed after a report showed US job growth picked up in December and wage gains exceeded expectations.

--With assistance from Sidhartha Shukla and Muyao Shen.