What happened? Bitcoin plunged 9% at one point, causing 170,000 people to be liquidated.

Zhitong App has learned that on Wednesday, Bitcoin experienced a sharp decline, almost wiping out all the gains it had made in the first few days of this year, reversing its long-term upward trend during a period of global traditional asset downturn.Data shows that the world's largest cryptocurrency by market capitalization fell by 9.2% at one point, dropping below $41,000. The day before, this digital asset broke through the $45,000 mark, reaching a 21-month high. Wednesday's price volatility was also the largest in over two months. At the time of writing, Bitcoin has narrowed its decline and is hovering below $43,000. This volatility has also affected cryptocurrency-related stocks, with the stock price of the US cryptocurrency exchange Coinbase (COIN.US) falling by 8.1% at one point before narrowing its decline.Bartosz Lipiński, CEO of cryptocurrency trading platform Cube.Exchange, said, "The prospect of whether the US Securities and Exchange Commission (SEC) will approve a physically-backed Bitcoin ETF is intensifying the volatility. The market is a bit overbought."According to Coinglass data, the cumulative amount of liquidation in the cryptocurrency market in the past 24 hours has exceeded $600 million, the largest since December 11th of last year. The number of liquidated positions is close to 176,000. Within one hour, the cryptocurrency market's total network contract liquidation reached $492 million, with long positions liquidated at $468 million.Until recently, Bitcoin had been soaring, with the value of cryptocurrencies rising nearly 160% in 2023, and the wealth of digital assets experiencing a broader rebound.In recent days, several issuers have submitted applications for designated authorized participants for their potential Bitcoin-related products, indicating that these funds may soon be approved. Broker-dealers designated as authorized participants include Wall Street heavyweights Jane Street Capital and JPMorgan.However, Markus Thielen, an analyst at Matrixport, stated in a report on Wednesday that he expects the SEC to reject all Bitcoin ETF proposals this month. Thielen stated that the recent applications still do not meet the requirements that must be met for SEC approval. Some market observers predict that if the SEC rejects these proposals, issuers may choose to take certain measures against the regulatory agency.Other digital assets also fell in sync with Bitcoin. On Wednesday, Ethereum fell by 11% at one point, while Solana's SOL fell by over 28%. However, both of them later narrowed their losses.Fadi Aboualfa, the research director of cryptocurrency custody company Copper Technologies Ltd., said in an email, "As we enter a new year with a lot of uncertainty, the market is starting to assess the risks of all asset classes, and we may see increased volatility in the short term. But regardless, we saw a similar decline in the market in early December last year, followed by a further rebound."