Matrixport Analyst: Anticipates ETF Rejections throughout January, Bitcoin Dips to 36K~38K
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.
Matrixport is not optimistic about the ETF passing in January
Matrixport: SEC attitude is not optimistic
Leveraged funds mostly bet on the ETF passing
If rejected by the SEC, continuous liquidation 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 surge to $50,000 by the end of January 2024.
Currently, there have been frequent meetings between ETF applicants and the SEC, and the applicants have resubmitted their applications. However, Matrixport believes that none of the applications have met a key requirement that must be satisfied before SEC approval.
Therefore, it is likely 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 stated that the five-person voting committee currently comprising the SEC is crucial for the approval of ETFs, and it is dominated by Democrats.
SEC Chairman Gensler does not have much enthusiasm for cryptocurrency in the United States, and it is highly unlikely that he will vote in favor of a Bitcoin spot ETF.
Although an ETF will undoubtedly boost 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 started betting on the approval of ETFs in September 2023, at least $14 billion in additional fiat and leveraged funds have been invested in cryptocurrencies. Some of this liquidity may be related to currency policy shifts, but among the $14 billion in bullish positions, around $10 billion may be related to the expectation of ETF approval.
Matrixport analysts stated that if the SEC rejects any proposals, continuous liquidation may be seen. Because Matrixport expects that most of the additional $5.1 billion Bitcoin futures positions will be liquidated, the Bitcoin price could quickly drop by 20% and fall to the range of $36,000 to $38,000.
No news until January 5, hedge your bets!
Matrixport analysts stated that there have been no approval news heard before Friday, January 5, 2024. They recommend traders to buy put options with a strike price of $40,000 at the end of January or even directly short Bitcoin through options to hedge their bullish positions.
Matrixport analysts stated that even if the SEC rejects the ETF, 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 usually bring positive news.
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