Matrixport Predicts SEC Will Reject Spot Bitcoin ETF Applications in January

Matrixport analyst Markus Thielen believes that the U.S. Securities and Exchange Commission (SEC) will reject all applications for launching a spot Bitcoin ETF in January.

The expert argues that despite frequent meetings between company representatives and the American regulator, and updated S-1 form documents, the applications still do not meet the requirements.

Thielen is confident that new products could aid the development of the crypto industry. However, SEC Chairman Gary Gensler still believes the sector requires stricter regulation.

“SEC Chairman Gary Gensler does not support cryptocurrencies in the U.S. Therefore, it is unlikely that he will agree to approve spot Bitcoin ETFs,” the expert wrote. “This might happen in the second quarter of 2024. We expect the SEC to reject all proposals in January.”

If the Commission does not give the “green light” this month, there is a high likelihood of a cascade of liquidations of “multi-billion” positions in Bitcoin-based perpetual contracts. This, the specialist believes, could lead to a ~20% drop in Bitcoin’s price to the $36,000-38,000 range.

In conclusion, Thielen recommended investors hedge long positions with put options or even “short” the leading cryptocurrency.

Bitmain and Matrixport co-founder Jihan Wu stated that analysts express their opinions independently, without any influence from management. According to him, the emergence of new products in the U.S. financial market is inevitable. This event will accelerate the influx of investments into digital gold, strengthening its position as a store of value and a risk-hedging asset.

In the past 24 hours, the price of the leading cryptocurrency has fallen by 5.2%, according to CoinGecko. At the time of writing, the asset is trading around $42,900.

The volume of liquidations of long positions in the leading cryptocurrency over the past day exceeded $600 million, according to Coinglass.

In late December, companies BlackRock, VanEck, Valkyrie, Fidelity, WisdomTree, Bitwise, Franklin Templeton, Invesco and Galaxy submitted final amendments to their spot Bitcoin ETF applications.

Earlier, Matrixport analysts suggested that Bitcoin’s price could reach $50,000 by the end of the current week.