Bitcoin Plunges Amidst SEC Rejection Fears
Bitcoin experienced a 7% drop in value, reaching as low as $41,804.95 before slightly recovering. At present, BTC is trading at $43,287.67, according to CoinGecko.
The Matrixport Report
The drop in Bitcoin’s price seems to have been triggered by a report from Matrixport titled “Why the SEC will REJECT Bitcoin Spot ETFs again.” This report, authored by Markus Thielen, Head of Research at Matrixport, was also published on the 10x Research blog under a different title.
ETF Applications Falling Short
In the report, Matrixport states that despite frequent meetings between ETF applicants and SEC staff resulting in refiling applications, none of the proposals meet the critical requirement necessary for approval. While some applications may be ready by Q2 2024, Matrixport expects all proposals to be rejected in January.
Panic in the Market
The news about potential rejections of Bitcoin ETF applications has caused market panic. Traders who were long on Bitcoin faced liquidation as approximately $14 billion worth of cash entered crypto markets due to ETF hype.
Liquidations and Market Volatility
Coinglass reported that $576 million worth of long positions were liquidated in the past day, with $553 million liquidated within the last 12 hours. Vetle Lunde from K33 Research agreed that the catalyst for the drop was the Matrixport report.
Analysts’ Opinions
Vetle Lunde disagreed with Matrixport’s prediction, stating that a denial of all pending Bitcoin ETF applications seems highly unlikely based on recent developments and conversations between the SEC and issuers.
Sparring on Twitter
The report sparked a debate among analysts on Twitter. Eric Balchunas, a Bloomberg Intelligence analyst, questioned Thielen’s basis for the report and referenced a previous tweet by Thielen suggesting that approval could be granted in early 2024.
Hot Take: Uncertainty Surrounding Bitcoin ETFs
The recent drop in Bitcoin’s price following fears of SEC rejections highlights the uncertainty surrounding Bitcoin ETFs. While Matrixport predicts that all pending applications will be rejected in January, analysts hold differing opinions. This volatility in the market has caused panic among traders and led to significant liquidations.
By
By
By
By
By