Bitcoin rose on Thursday, recovering some of its losses from the previous day, when the cryptocurrency sold off on concerns about the potential of a bitcoin ETF approval that many expect as soon as next week.
The flagship cryptocurrency was last higher by about 3% at $43,870.01, according to Coin Metrics. On Wednesday it fell as much as 6% as short-term traders speculated that a bitcoin ETF would not be approved by the Securities and Exchange Commission and liquidated overleveraged positions.
“This bitcoin bounce comes after a healthy wipeout of leveraged positions,” said Sam Callahan, lead analyst at bitcoin services firm Swan Bitcoin. “The bounce is likely related to investors positioning themselves for the imminent approval of multiple spot Bitcoin ETFs, which could be a large catalyst for bitcoin’s price in 2024 and for many years to come.”
The rebound extended across the crypto market, with ether rising 2.5% Thursday and Solana’s SOL token advancing 3%.
In stocks, Coinbase and Microstrategy added 3% and 4%, respectively. Among the miners, Riot, CleanSpark and Iris Energy were higher by 4% each, while Marathon jumped nearly 7%.
A bitcoin ETF decision by the SEC is widely expected to come as soon as next week. The agency’s first deadline to approve or reject an application is Jan. 10 for the Ark 21 Shares bitcoin ETF.
The ETF hype has been the most significant driver of the bitcoin price since last summer, helping it propel the cryptocurrency to a 157% gain for 2023. Investors expect the launch of U.S. bitcoin ETFs to usher in a wave of new investors into the crypto market, though there has been some concern that the market reaction may not live up to the hype in the short term.