Bitcoin (BTC-USD) closer fell below $40,000, losing more than 7% of its value in 24 hours. The cryptocurrency has been under pressure since Tesla (TSLA) CEO Elon Musk announced last week that the electric car maker would stop accepting bitcoin as payment due to environmental concerns.

The latest drop came as investors are waiting for the U.S. Securities and Exchange Commission (SEC) to decide on the approval of the first spot bitcoin exchange-traded fund (ETF), which would allow retail investors to buy and sell the digital asset without having to own it directly.

Several firms, including BlackRock (BLK), the world's largest asset manager, have applied to launch a spot bitcoin ETF in the U.S., following the success of similar products in Canada and Europe. A spot bitcoin ETF would track the actual price of bitcoin, unlike the existing bitcoin futures ETFs, which track the price of bitcoin futures contracts.

The SEC has been reluctant to approve a spot bitcoin ETF, citing concerns over market manipulation, fraud, and investor protection. However, some analysts believe that the regulator may be more open to the idea now, as the cryptocurrency market has grown and matured over the years.

One of the leading candidates for a spot bitcoin ETF is Grayscale Investments, which operates the largest bitcoin trust in the world. Grayscale has been trying to convert its bitcoin trust into a spot bitcoin ETF since 2022, but was rejected by the SEC. However, a court ruling in August 2023 overturned the SEC's decision, saying that it was "arbitrary and capricious".

Grayscale has since resumed its discussions with the SEC, hoping to get the green light for its conversion. If approved, Grayscale's spot bitcoin ETF would be the first of its kind in the U.S., and could attract more institutional and retail investors to the cryptocurrency space.

Bitcoin is still far from its all-time high of nearly $69,000, which it reached in November 2021. The cryptocurrency has faced several challenges since then, including regulatory crackdowns, hacking incidents, and market volatility. However, some experts remain bullish on bitcoin's long-term prospects, citing its limited supply, growing adoption, and technological innovation.

What do you think about bitcoin's price movement and the possibility of a spot bitcoin ETF?