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Bitcoin and other cryptocurrencies dawdled as investors awaited the official U.S. Securities and Exchange Commission approval on spot bitcoin exchange-traded funds, a day after the regulator’s X account posted a false announcement on the highly anticipated news.
The price of bitcoin fell more than 2% Wednesday, extending losses from the previous day, to $45,398.66, according to Coin Metrics. Meanwhile, ether (ETH) rose more than 7% to $2,434.41. Earlier, it rose as high as $2,453.04, its highest level since May 2022.
Both coins initially spiked on Tuesday afternoon in the short period before the SEC said its X, formerly known as Twitter, account had been compromised and misinformed the public. Bitcoin rose as high as $47,901, though that was not the rocket ship rally many hoped to see. Ether climbed to about $2,390.
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Bitcoin and ether over the past 24 hours
Wednesday marks the deadline for the SEC to either approve or deny the Ark 21Shares spot bitcoin ETF application. It is widely believed that the agency will approve several at once. Many investors have been expecting the decision to be a sell-the-news event, with so many sitting on high unrealized profits — a trend that historically precedes price corrections — according to data from CryptoQuant.
“As much as bitcoin demand will certainly gain from the approval of the ETFs … a price correction can’t be ruled out,” said Julio Moreno, CryptoQuant’s head of research.
If bitcoin rises significantly after upon the SEC’s ETF decision, bitcoin could be at risk of a correction to as low as $36,000, he added.
Meanwhile, investors are looking ahead to what comes after a bitcoin ETF approval, particularly for ether.
“Ether has taken a big hit against bitcoin in recent months, but on Tuesday we saw signs of a bottom for ether against bitcoin after the ETH-BTC rate rallied over 8% off the lows,” said Joel Kruger, analyst at LMAX. “It’s possible the market is starting to look past what it believes is now a near certainty with the bitcoin spot ETF approvals and is now thinking about the next push towards an SEC approval of spot eth ETFs.”
The SEC is due to give decisions on spot ETH ETF applications beginning in May. BlackRock, Invesco, Ark and VanEck are among the firms in line for approval, as well as Grayscale, which is seeking to convert its existing Ethereum Trust (ETHE) into an ETF. Traders are hopeful that greenlit bitcoin ETFs will lead to approved ETH ETFs since the market conditions would be similar.
Ether lagged bitcoin in 2023, rising just 90% compared to bitcoin’s 157%. Ether rallies tend to follow bitcoin when crypto bull markets heat up, and precede altcoin rallies.
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