Bitcoin sees a decline amid speculation over SEC’s ETF decision

As a result of speculations circulating that U.S. securities regulators could reject proposals for a cryptocurrency exchange-traded fund (ETF), Bitcoin saw a decline on Thursday, extending a recent downward trend. Bitcoin had dropped to $43,069.3 as of 06:11 ET (11:11 GMT). This was a 4.63% decline.

The renowned cryptocurrency had a notable decline on Wednesday, pushing its value down by up to 7% from this year’s peak of $45,922 on January 2.

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According to analysts at AllianceBernstein, the correction in Bitcoin’s value originated from a report by Matrixport, an independent crypto trading firm. The report discussed the potential approval of a Bitcoin spot ETF by the U.S. Securities and Exchange Commission (SEC).

Matrixport’s Head of Research, Markus Thielen, indicated in a note that the ETF applications might face rejection due to not meeting a “critical requirement.” Thielen added that SEC Chair Gary Gensler is unlikely to support Bitcoin spot ETFs, expressing a cautious stance towards crypto in the U.S.

The SEC is expected to decide on January 10 regarding the approval of a spot ETF application from Ark and 21 Shares. This decision could influence other ETF applications, including one from BlackRock, the world’s largest asset manager.

Reports suggest that Goldman Sachs is in discussions to become an authorized participant for potential spot Bitcoin ETF funds offered by BlackRock and Grayscale.

While speculators anticipate a surge in Bitcoin with ETF approval, analysts caution that recent scandals and increased interest rates may temper the expected bull run. The SEC has consistently rejected spot bitcoin ETF applications over the past two years, citing concerns about the token’s decentralized and volatile nature.

AllianceBernstein analysts remain optimistic, viewing price dips as opportunities to buy Bitcoin and Bitcoin miners. They anticipate a significant market bounce following the actual approval event.