Crypto News

Crypto Market Dips As Matrixport Forecasts SEC Rejection Of Bitcoin Spot ETFs, See What Really Happened

In a surprising turn of events, Matrixport’s latest report has cast a shadow over the crypto market, suggesting that the U.S. Securities and Exchange Commission (SEC) is poised to reject all Bitcoin spot exchange-traded funds (ETFs) in January. 

Matrixport predicts that final approval might not materialize until Q2, coupled with a forecasted Bitcoin price drop to the range of $36,000 to $38,000. The report recommends investors hedge their positions by acquiring put options or even taking a direct short position on Bitcoin.

Matrixport’s cautious stance is highlighted in its statement on X, “Matrix on Target projects a January rejection for Bitcoin Spot ETFs by the SEC, cautioning traders to hedge long exposure. With SEC Chair Gensler’s skepticism towards crypto, a potential -20% Bitcoin price drop is anticipated upon ETF denial, though a positive end-of-2024 outlook remains.”

In response to this report, the broader crypto market experienced a brief downturn, with BTC briefly dipping below $41,000 and ETH falling below $2,100. The market, however, is showing signs of rebounding. Notably, liquidations reached a noteworthy $540 million in the past four hours.

Bloomberg ETF Analyst Disagrees And Clears The Air

Contrary to Matrixport’s pessimistic outlook, Bloomberg ETF Analyst Eric Balchunas expressed a more optimistic view on X, stating, “We have heard nothing to indicate anything but approval. Not sure why Matrixport analyst is flipping so quickly, still think the chance of passage is as high as 90%, including multiple mainstream journalists and internal sources.”

Adding another layer to the unfolding narrative, Greekslive reported a diminishing likelihood of the ETF’s approval this week. Options data, including a drop in ATM option implied volatility to 52% for the week and below 65% for the January 12 expiration, suggests increased skepticism. Block trades are also witnessing active put buying, indicating a cautious sentiment among market participants.

In summary, Matrixport’s report has injected uncertainty into the crypto market, contrasting with more optimistic sentiments from other industry experts. The unfolding developments surrounding Bitcoin spot ETFs will likely shape the market’s trajectory in the coming weeks.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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