Bitcoin Pulls Back Ahead of SEC Decision

On Wednesday, Bitcoin experienced a significant pullback, wiping out most of its gains from the first two days of the year. This decline comes just before the highly anticipated decision by the U.S. Securities and Exchange Commission (SEC) regarding the approval of exchange-traded funds (ETFs) that directly invest in bitcoin.

According to CoinDesk data, the cryptocurrency, BTCUSD, experienced a 5.7% drop over the past 24 hours, reaching as low as $40,838 on Tuesday. This followed a rally on Tuesday that pushed it above $45,000, the highest level it has reached since April 2022. Despite a rally of over 150% in 2023, bitcoin still remains more than 35% below its peak in 2021.

Crypto market participants generally anticipate that the SEC will approve a spot bitcoin ETF by January 10. This is the deadline for the agency to decide on the application filed by ARK Investment and 21 Shares. However, not all share this optimism. Analyst Markus Thielen from Matrixport predicts that the SEC will reject all bitcoin ETF applications this month due to potential shortcomings in meeting the necessary requirements.

Furthermore, there are speculations that a report may have triggered Wednesday's price decline in bitcoin. Gautam Chhugani and Mahika Sapra, analysts at Alliance Bernstein, commented that any rumor in a bullish market with high leverage could trigger a cascading effect.

As the deadline for the SEC decision approaches, the crypto community eagerly awaits the outcome that could significantly impact the future of bitcoin investment.