Nearly $500 million was wiped out in one hour, Bitcoin plummeted 10% to celebrate its 15th anniversary

On January 3, people who were immersed in the activities commemorating the 15th anniversary of the Bitcoin creation block were brought back to reality by the news of Bitcoin's sharp correction.

According to the Binance market, at 19:00 on the evening of January 3rd, Beijing time, Bitcoin experienced a sharp correction. In one hour, Bitcoin dropped from 45,000 to 45,000. The US dollar fell to a minimum of $40,750, a drop of more than 9.4%, and an intraday drop of more than 10%.

< p style="text-align: left;">According to Coinglass data, within just one hour of rapid decline, the entire cryptocurrency market contract liquidated nearly US$500 million, and the Bitcoin liquidation exceeded US$100 million.

< h3 style="text-align: left;">Concerns about the rejection of Bitcoin spot ETFs emerged, and the Matrixport report became the trigger

Since the second half of 2023, Bitcoin spot ETFs have been the focus of the entire cryptocurrency circle. Amid long optimism, Bitcoin has risen from more than $25,000 in the middle of the year to nearly $46,000.

Recently, almost everyone’s attention has been focused on the U.S. Securities and Exchange Commission (SEC)’s possible approval of a Bitcoin spot ETF on January 10. Decide. On January 3, the decentralized prediction platform Polymarket "Will the Bitcoin ETF be approved before January 15?" predicted the price of the Yes side of the contract to be 89 cents, which means that the market believes that the probability of approval is 89%, and Previously the figure was 50%.

At the same time, Bloomberg ETF analysts Eric Balchunas and James Seyffart both said that the probability of a Bitcoin spot ETF being approved before January 10 is 90%. However, James Seyffart also believes that although it is unlikely, there is still a possibility of rejection this month because the SEC may want more time.

Behind the optimism, many people are worried that Bitcoin will have a sharp correction.

An industry analyst told Techub News that regardless of whether the Bitcoin spot ETF will pass, Bitcoin will make a sharp correction, and may even be the earliest to pass. faster. In the past half year, the market has almost digested the news of possible approval of a Bitcoin ETF, while any news of rejection may lead to a sell-off, and many people have been waiting for this moment.

On January 3, Matrixport issued a report stating that the SEC is expected to reject all proposals in January because all applications fail to meet key requirements. The five-member SEC voting committee, dominated by Democrats, is unlikely to approve a Bitcoin spot ETF because it would legitimize Bitcoin as an alternative store of value.

< p style="text-align: left;">Matrixport predicts that if the SEC rejects approval, the price of Bitcoin could quickly drop by 20%.

At the critical juncture of whether the SEC can approve the Bitcoin spot ETF, all investors have become frightened. The market expects that even if it is passed, "Sell the news" will appear. "There are not a few people who say this. At this moment when everyone's nerves are high, any news, good or bad, will trigger a chain reaction.

The selling of profit-makers, the aggressive entry of bearish investors, and the liquidation of long orders. After the initial decline, this series of actions promoted The price will continue to decline in the short term.

U.S. stocks have had a "bad start", and macro risks in the new year deserve attention

On January 2, the first trading day in 2024, U.S. Treasuries and most U.S. stock indexes had a "bad start." As of the close of the day, the Nasdaq fell 1.63%, the largest one-day decline since October last year, and the S&P 500 fell 0.57%. It opened nearly 0.5% lower today. Additionally, traders in Fed fund futures expect the Fed to cut interest rates 5-7 times by 25 basis points each in 2024, however, they slightly lowered their expectations for the first rate cut in March.

Perhaps due to the need to take profits, or perhaps because the risk asset market has performed well for several consecutive months, the decline in U.S. stocks at the beginning of the year has made some investors Increased vigilance. The reason is actually very simple. If the macro environment is unfavorable, even if the spot ETF passes, Bitcoin, as an extremely risky asset, will not attract more investors.

It is worth noting that although the market is frantically hyping expectations of interest rate cuts, just like the sudden collapse of Bitcoin today, once the consensus of most people in the market is broken, For example, if the Federal Reserve postpones an interest rate cut or raises interest rates again, the devastation caused may be unimaginable. Previously, the "third leader" of the Federal Reserve and New York Fed President Williams took the lead in pouring cold water on expectations of an interest rate cut. He said that there is no real discussion of interest rate cuts at present, and the Fed must be prepared to raise interest rates again if necessary.

In addition, regarding the halving of Bitcoin block rewards that has been hotly speculated in the market, the author would like to remind that Bitcoin has been produced through mining. With the quantity exceeding 90%, it is questionable whether the speed of output of the remaining 10% is still important.