Bitcoin nosedives an hour before expected ETF decision

Bitcoin was back on the rise after briefly dropping below $45,000, but dipped 2% just half an hour before the expected SEC decision

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Artwork by Crystal Le

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Cryptocurrencies and related equities whipsawed Wednesday, with investors and analysts waiting to hear the US Securities and Exchange Commission’s ruling on a bitcoin ETF. 

Bitcoin, which had been steadily climbing earlier in the day after dipping below $45,000, lost around 2% as of 3:30 pm ET Wednesday. Ether, on the other hand, turned things around after a disappointing few days, gaining 8.5% Wednesday afternoon. 

The moves come after a false bitcoin ETF approval report — posted from the SEC’s own X account — caused a rally and crash in BTC Tuesday afternoon. 

Read more: SEC will investigate, ‘determine appropriate’ steps following X account compromise

“Another interesting twist to yesterday’s tale (as if we didn’t have enough!) is ETH’s move on the approval news and denial,” Noelle Acheson, author of the ‘Crypto is Macro Now’ newsletter, said. “It jumped along with BTC, and then kept on going while BTC plunged.”

Wednesday marks the SEC’s deadline to approve or deny Ark and 21Shares’ bitcoin ETF application. Based on SEC filings submitted Wednesday and comments from issuers and analysts, traders expect the agency to also rule on other similar applications it has been presented. 

Acheson added that positive news on the bitcoin ETF front could drive ETH prices higher as investors hope for a similar product approval in the future. 

“Given approval of the BTC spot ETF, approval for the ETH version is likely since the same market considerations hold,” she said. “ETH spot ETFs would probably not be allowed to offer staking yield, so demand for them is likely to be more muted, but there still could be some upside through broader distribution and greater awareness.”

On Wednesday, cryptocurrency exchange Coinbase witnessed fluctuations in its share price. Coinbase is expected to serve as the custodian for eight out of the eleven spot ETF applications that investors are closely monitoring. After rising earlier in the trading session, COIN inched lower in the last half hour of the trading day, losing 1.2%. 

Galaxy Digital, which has its hat in the ring with its Invesco Galaxy Bitcoin ETF application before the SEC, conversely saw its shares soar. GLXY, which trades on the Toronto Stock Exchange, gained 6% Wednesday.


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