According to analysts from trading firm Matrixport, they believe that a Bitcoin spot ETF will be realized in the second quarter of 2024, but they expect the SEC to reject all proposals in January.
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Matrixport is not optimistic about ETF passing in January
Matrixport: SEC’s attitude is not optimistic
Leveraged funds mostly bet on ETF passing
If rejected by the SEC, consecutive liquidations will be seen
There is still hope!
Matrixport analysts stated that they predicted earlier this year that Bitcoin could reach $45,000 before Christmas. They even anticipate that if a Bitcoin spot ETF meets all the requirements of the U.S. Securities and Exchange Commission (SEC), Bitcoin could soar to $50,000 by the end of January 2024.
Currently, there are frequent meetings between ETF applicants and the SEC, and applicants have resubmitted their applications. However, Matrixport believes that none of the applications meet a key requirement that must be met for SEC approval.
Therefore, it is possible that a Bitcoin spot ETF will not be realized until the second quarter of 2024, and it is expected that the SEC will reject all proposals in January.
Matrixport analysts state that the five-member voting committee currently composing the SEC is crucial for the approval of the ETF, and it is dominated by Democrats.
SEC Chairman Gensler does not have much enthusiasm for cryptocurrency in the United States, and the likelihood of him voting in favor of a Bitcoin spot ETF is very low.
Although the ETF will undoubtedly fuel the growth of the entire cryptocurrency industry, based on Gensler’s comments in December 2023, he still believes that this industry needs stricter regulation. From a political perspective, there is no reason to approve a Bitcoin spot ETF and legalize Bitcoin in another form.
Since traders began betting on the approval of the ETF in September 2023, at least $14 billion in additional fiat and leveraged funds have been invested in cryptocurrencies. Some of these funds may be related to currency policies, but out of the $14 billion in long positions, it is estimated that $10 billion is related to the expectation of ETF approval.
Matrixport analysts state that if the SEC rejects any proposals, consecutive liquidations may be seen. This is because Matrixport expects that a majority of the additional $5.1 billion Bitcoin futures positions will be liquidated, which could lead to a rapid drop in Bitcoin prices of -20%, falling to the range of $36,000 to $38,000.
No news before January 5th, hedge your positions!
Matrixport analysts state that there have been no approval news heard before Friday, January 5th, 2024. They suggest that traders purchase put options with a strike price of $40,000 expiring at the end of January or even directly short Bitcoin through options to hedge their long positions.
Matrixport analysts state that even if the ETF is rejected by the SEC, they still expect the price of Bitcoin to be higher than the $42,000 level at the beginning of the year by the end of 2024, as election years and Bitcoin mining years in the United States are usually accompanied by positive news.
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Extended reading
Matrixport co-founder Wu Jihan’s response: Analysts operate independently, ETF approval is inevitable
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