The FUD has begun. The Bitcoin price briefly fell to $40,000 from the previous level of $45,500. The drop was based on the rumor that the SEC will reject all Bitcoin Spot ETF applications. The price has since recovered and now lies at $42,700.
Here is what happened.
The rumor started with a report by an analyst of Matrixport, who predicted that ALL ETF applications will be rejected in January. This is, however, just a prediction, with no actual proof.
Bitcoin Flash-Crash
The entire crypto market fell upon this news, with $BTC dumping by $5k within a few minutes. This is the first time such a huge dump is happening since Bitcoin bottomed at $15k. A total of $500 million in long positions have been liquidated.
Here is how the market reacted:
- $BTC down 5.5%
- $ETH down 6%
- $SOL down 8%
- $AVAX down 10%
- $LINK down 11%
- $EGLD down 14%
More FUD expected
With the decision of the SEC being only days if not hours away, we will be witnessing more FUD and market volatility. The likelihood of a Bitcoin Spot ETF approval, however, still is very high. Bloomberg ETF analyst, EricBalchunas, gives a +90% chance of approval due to a number of factors, especially the SEC’s significant change in behaviour by way of engaging with applicants and providing them with guidance on updating their applications.