Matrixport issued a research report on January 3, warning that due to the current unmet requirements of the SEC for Bitcoin spot ETFs, the SEC will not approve any Bitcoin spot ETFs in January, causing Bitcoin to plummet to around $36,000 to $38,000.
Bitcoin experienced a sudden sharp decline on the evening of January 3, dropping from around $44,500 to $40,750, marking the most severe drop in several months. At the time of writing, the price has slightly recovered to $42,550, with a 24-hour drop of 6.3%.
The sudden drop is speculated to be related to a research report titled “Why Will the SEC Reject Bitcoin Spot ETF Applications Again?” released by Matrixport in the evening. The report suggests that although the applicants for Bitcoin spot ETFs have had multiple meetings and negotiations with the SEC, the requirements of the SEC for Bitcoin spot ETFs have not been fully met. Therefore, the SEC will not approve any Bitcoin spot ETF applications in January and will delay them until the second quarter of 2024.
Matrixport explains that SEC Chairman Gary Gensler has long held a negative attitude towards cryptocurrencies and believes that cryptocurrencies are not yet subject to strict regulation. Therefore, from a political perspective, Gensler is unlikely to quickly change his attitude and embrace Bitcoin. The SEC’s five-person voting committee, dominated by the Democratic Party, will also not vote in favor of Bitcoin spot ETFs or recognize Bitcoin as a store of value in the short term.
Based on this premise, Matrixport also states in the report that once the applicants’ proposals are rejected by the SEC, the price of Bitcoin will plummet to around $36,000 to $38,000 (a drop of about 20%) in a short period of time. The bullish funds that have been betting on the potential approval of Bitcoin spot ETFs since September 2023 will also be liquidated.
Matrixport even directly advises investors to immediately buy put options for Bitcoin or directly short Bitcoin if no information about the approval of any Bitcoin spot ETF is obtained by January 5.
Although we cannot determine whether the market crash is related to Matrixport, it is true that BTC plummeted shortly after the release of the report, with over 170,000 people liquidated in the past 24 hours. Dynamic Zone reminds investors to exercise caution as the market is currently highly volatile.
Furthermore, Matrixport also states that although they believe the price of Bitcoin will be affected by the SEC’s decision, events such as the Bitcoin halving in 2024 and the US presidential election may have a positive impact on its price. The price of Bitcoin at the end of 2024 is expected to be higher than the beginning of the year, reaching over $42,000.
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