In a surprising turn of events, Matrixport, a leading cryptocurrency financial services platform, published a report warning investors about the possible rejection of all Bitcoin (BTC) spot ETFs by the US Securities and Exchange Commission (SEC) in January. The report suggests that final approval may not be achieved until the second quarter of 2024.
In a surprising turn of events, Matrixport, a leading cryptocurrency financial services platform, published a report warning investors about the possible rejection of all Bitcoin (BTC) spot ETFs by the US Securities and Exchange Commission (SEC) in January. The report suggests that final approval may not be achieved until the second quarter of 2024.
Matrixport analysis further predicts a significant drop in the price of Bitcoin, with recommendations for investors to consider put options or direct short sales of Bitcoin. The report challenges consensus expectations by stating that the SEC will likely reject all pending Bitcoin spot ETF applications.
Notably, major financial institutions such as BlackRock, Fidelity, Ark Invest, and VanEck have applied for Bitcoinspot ETFs, pending SEC approval. Meanwhile, Matrixport indicates that they have observed frequent meetings between ETF applicants and SEC staff.
These interactions led applicants to resubmit their applications. According to Matrixport, all of the applications lack compliance with a critical requirement necessary for SEC approval. They suggest this requirement could be met in the second quarter of 2024. However, the expectation is that the SEC will reject all proposals in January.
The political landscape of the SEC
The latest report emphasizes the political landscape at the SEC, indicating that the current five-person voting commissioners, led by Democrats, may influence the decision. SEC Chairman Gary Gensler cautious approach to cryptocurrencies increases skepticism, as it has not adopted cryptocurrencies in the US.
This, according to Matrixport, suggests a possible reluctance to approve Bitcoin spot ETFs. The report suggests that Gensler believes the crypto industry requires stricter compliance, making the approval of a Bitcoin ETF unlikely. The possible rejection of Bitcoin ETFs could have major repercussions for the market.
Matrixport estimates that approximately $14 billion additional fiat money and leverage has been deployed in the cryptocurrency market since traders began speculating about the ETF’s approval in September 2023. If the SEC denies approval, the report anticipates cascading liquidations, with Bitcoin prices potentially falling 20% quickly. , returning to the $36,000/$38,000 range.
Despite the possible rejection of the ETF, Matrixport expresses optimism about Bitcoin’s long-term prospects. It still expects the price of Bitcoin to surpass its starting point of the year ($42,000) by the end of 2024. As Guru-Investingreported, Matrixport had previously forecast that the price of Bitcoin was positioned to reach $50,000 in January. However, the latest report indicates a change in their outlook.