Futures Liquidation Hits $155M as U.S. SEC Nears Decision on Bitcoin ETFs
As anticipation builds around the potential approval of a Bitcoin spot exchange-traded fund (ETF) in the United States, traders betting against rising Bitcoin (BTC) prices suffered significant losses, exceeding $100 million in the past 24 hours.
Bitcoin experienced a remarkable 9% surge on Monday, briefly surpassing $47,000, a level not seen since March 2022. However, the gains were partially retraced. The crypto exchange OKX recorded the highest losses at $84 million, followed by Binance at $71 million. This surge in prices led to the liquidation of around $155 million in shorts across various futures tracking crypto markets.
Open interest, reflecting the number of unsettled futures contracts, surged by over 8% in the past 24 hours. This indicates that traders are actively entering new positions after the recent liquidation event, suggesting an expectation of continued market volatility.
Liquidation occurs when an exchange forcibly closes a trader’s leveraged position due to a partial or total loss of the initial margin. Such events can serve as indicators for potential local tops or bottoms in the market, helping traders adjust their positions accordingly.
Monday’s market movements coincided with key players, including BlackRock and Grayscale, filing their offering fees with the U.S. Securities and Exchange Commission (SEC). This marks a crucial step toward the potential launch of the first-ever Bitcoin ETF in the U.S. Currently, thirteen proposed ETFs await SEC approval, and the competition for customers is intensifying. Some issuers are offering no fees for the first six months or a fee waiver for assets under management exceeding $5 billion.
The final decision on ETF approvals or denials is expected on Wednesday. In the meantime, SEC officials have reportedly provided comments to prospective issuers, addressing minor details in the amended S-1 forms. These filings are anticipated to be submitted on Tuesday, adding to the suspense surrounding this significant development in the cryptocurrency market.