Bitcoin tumbled on Wednesday, giving back all of its gains from the rally earlier this week.
The price of bitcoin was last lower by 6% at $42,159.37, according to Coin Metrics. On Tuesday it climbed as high as $45,913.30, its highest level since April 2022.
The drop followed Nasdaq’s worst day since October, as traders pulled back from tech stocks after they led the advance in 2023. Stocks traded lower on Wednesday, while bond yields rose.
Investors also cited some concern that the Securities and Exchange Commission wouldn’t approve an exchange-traded fund this year as expected by many bitcoin bulls.
“The market is jumpy ahead of the eagerly awaited ETF decision, and relatively high speculative positioning is likely contributing to the price volatility,” said Zach Pandl, director of research at Grayscale Investments, one of the asset managers hoping to get ETF approval by the SEC.
“TradFi assets also stumbled out of the gate in 2024, which may have contributed to higher risk aversion,” he added. “After the positioning washout, we would expect bitcoin to hold around current levels as markets await a decision on spot bitcoin ETFs.”
January hasn’t been an especially strong month for bitcoin. It’s ended the month in the green five out of the last 11 years, according to CoinGlass.
Before the new year rally, bitcoin was coming off a three-week consolidation period, but still managed to end December with a 12% gain. It ended 2023 up 157%.
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