Bitcoin stumbled on Friday 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. Crypto stocks dropped in morning trading. Marathon Digital fell 8%; Bit Digital fell 7%; Bitfarms fell 6%; Riot Blockchain, Canaan and BIT Mining fell 5%; CleanSpark fell 4%; MicroStrategy fell 2%; Coinbase fell 1%.
The token traded at around $43,530 as of 10.00 a.m. in New York on Friday, marking a decline of 1.71% in the last 24 hours. 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.
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.
“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.”
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