The price of %Bitcoin ($BTC) fell 8% in overnight trading to $42,500 U.S. as more than $500 million U.S. worth of positions across derivatives exchanges were liquidated.
The liquidations and subsequent decline in Bitcoin’s price erased the entire move higher a day earlier when the price of the largest %Cryptocurrency broke above $45,000 U.S. and reached its highest level in 21 months.
Analysts are speculating that worries around the anticipated approval of a spot Bitcoin exchange-traded fund (ETF) have started to creep into the market, with CNBC host Jim Cramer warning that approval of a Bitcoin ETF in the U.S. could prompt a selloff in digital assets.
Last week, the Reuters (NYSE: TRI) issued a report saying that the U.S. Securities and Exchange Commission (SEC) could approve a Bitcoin ETF as soon as today (Jan. 3).
However, financial services firm %Matrixport issued a note to clients saying that it doesn’t anticipate a Bitcoin ETF being approved until the spring of this year.
“…We expect the SEC to reject all proposals in January,” said Matrixport.
The price of Bitcoin fell as low as $40,550 U.S. in overnight trading before bouncing back to its current level of $42,500 U.S.
Bitcoin’s price has risen 157% over the past 12 months, though trading in the cryptocurrency remains volatile.
