In the realm of cryptocurrency, the crypto community eagerly awaits the approval of a spot Bitcoin ETF (Exchange Traded Fund) as the dates for decisions mark nearer. However, a recent report from Matrixport, a crypto financial services platform, has upset the community by forecasting that the SEC (Securities and Exchange Commission) will not approve the Bitcoin ETF applications this week.
Matrixport’s predictions on Bitcoin ETF approval
According to Matrixport, the SEC is unlikely to approve any of the 14 Bitcoin ETF applications submitted by the asset management giant. They predict that approval may come in the second quarter of 2024. In addition to forecasting the ETF approval timeline, Matrixport also predicts a potential drop in the Bitcoin price from its current level of $45,000 to a range of $36,000 to $38,000. They suggest that investors consider buying put options or directly shorting Bitcoin.
In a recent prediction on January 2, 2024, Matrixport also forecasted that Bitcoin would reach the $50,000 level by the end of the month. The reasons behind this particular prediction are not yet known, leading community members to ponder the confusing nature of Matrixport’s forecasts. Notably, this prediction coincides with the SEC’s consideration of spot Bitcoin ETF approval, adding a layer of complexity to the overall situation.
Matrixport’s view on SEC leadership and Crypto industry support
Matrixport argues that the current leadership of the SEC, headed by Chair Gary Gensler, who is primarily aligned with the Democratic Party, is not supportive of the crypto industry. Gensler advocates for stricter compliance within the crypto space and may not favor legitimizing Bitcoin as a store of value from a political standpoint, potentially influencing the decision on ETF approval.
The firm further suggests that a denial by the SEC could trigger massive liquidation and widespread sell-offs, with Bitcoin prices potentially dropping by around -20% to the $36,000/$38,000 range due to the unwinding of $5.1 billion in perpetual long Bitcoin futures.
However, even in the event of an ETF denial, Matrixport maintains a positive outlook for Bitcoin by the end of 2024, expecting prices to surpass the year’s starting point of $42,000. This optimism is based on historical trends in US election years and Bitcoin mining.
