According to a report by trading agency Matrixport analysts (1/3), they believe that a Bitcoin spot ETF will be implemented in the second quarter of 2024, but expect the SEC to reject all proposals in January.
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ToggleMatrixport is not bullish on January ETF pass
Analysts at Matrixport said they had predicted at the beginning of the year that Bitcoin could reach $45,000 before Christmas. It is even expected that Bitcoin could surge to $50,000 by the end of January 2024 if the Bitcoin Spot ETF meets all SEC requirements.
There are currently frequent meetings between ETF applicants and the SEC, and applicants have resubmitted applications, but Matrixport believes that all applications have not met a key requirement that must be met before SEC approval.
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Therefore, a Bitcoin spot ETF may not be implemented until the second quarter of 2024, and the SEC is expected to reject all proposals in January.
Matrixport: SEC is not optimistic
Matrixport analysts said the SEC’s current five-member voting committee is crucial to the SEC’s approval of ETFs and is dominated by Democrats.
SEC Chairman Gensler is not enthusiastic about U.S. cryptocurrencies, and it is very unlikely that he will vote in favor of a Bitcoin spot ETF.
While ETFs will undoubtedly allow the entire cryptocurrency industry to flourish, based on Gensler’s comments in December 2023, he still believes that the industry needs stricter regulation. From a political perspective, there is no reason to approve a Bitcoin spot ETF to legitimize Bitcoin in another form.
Leveraged funds mostly bet on ETFs.
Since traders began betting on ETF approval in September 2023, at least $14 billion in additional fiat and leveraged funds have been poured into cryptocurrencies. Some of this liquidity is related to a possible dovish turn in monetary policy, but of the $14 billion in longs, perhaps $10 billion is related to ETF approval expectations.
SEC veto would see continuous liquidations
Analysts at Matrixport said that if there were any SEC vetoes, we could see consecutive liquidations. Because Matrixport expects most of the additional $5.1 billion in Bitcoin futures positions to be liquidated, we may soon see Bitcoin prices drop -20%, back to the $36,000-$38,000 range.
If there is no news before January 5th, take heed!
Matrixport analysts said they had not heard of any approval before Friday, January 5, 2024. Traders are advised to purchase put options with an exercise price of $40,000 at the end of January, or even short Bitcoin directly with options to hedge their long positions.
There is still hope!
Matrixport analysts said that even if the SEC vetoes the ETF, the price of Bitcoin is still expected to be higher than the $42,000 level at the beginning of the year by the end of 2024, because the US election year and the Bitcoin mining year are usually positive news.
