SEC will REJECT Bitcoin Spot ETFs Again Says Matrixport Report

The post SEC will REJECT Bitcoin Spot ETFs Again Says Matrixport Report appeared first on Coinpedia Fintech News

In a recent report, Matrixport, a prominent cryptocurrency finance platform, has released a report predicting another potential rejection of Bitcoin Spot ETFs by the U.S. Securities and Exchange Commission (SEC). According to this forecast, Bitcoin prices could drop -20%, settling back within $36k-$38k.

Bitcoin Spot ETF Will Be Rejected

According to the latest report from Matrixport, the chances of the SEC denying approval for Bitcoin Spot ETFs, challenge the high expectations within the crypto community. 

In the event of such a denial, Matrixport foresees significant consequences, including cascading liquidations, particularly within the $5.1 billion in additional perpetual long Bitcoin futures. The potential -20% decrease in Bitcoin prices could swiftly bring them back to the $36,000 to $38,000 range.

As the January 5, 2024 deadline approaches without any approval signals, Matrix on Target suggests a defensive strategy for traders. This involves hedging long exposure by purchasing $40,000 strike puts for the end of January or even considering outright short positions in Bitcoin through options.

Price Fall Despite Approval

While many expect the approval of a Bitcoin ETF to spark price spikes, Matrixport’s insight sparks a discussion regarding a price correction. However, concerns are raised about the ETF becoming a target for short sellers, potentially leading to increased volatility or even transforming into a “sell the news event.

Moreover, the green light for a Bitcoin ETF could attract heightened regulatory scrutiny across the cryptocurrency market. This increased oversight might usher in greater taxation, reporting requirements, and potential usage restrictions on Bitcoin, potentially dampening investor enthusiasm.

Some market observers assert that the market may have already factored in the possibility of a Bitcoin ETF approval. In the event of a denial, disappointment could ensue, reminiscent of the sell-off witnessed in 2017 when the Winklevoss Bitcoin ETF faced rejection.

Meanwhile, the final verdict by the SEC stands as a critical moment, and its aftermath will undoubtedly shape the narrative of Bitcoin in the coming days.