In contrast to market consensus, Matrixport analyst predicts SEC will reject bitcoin spot ETF proposals
Matrixport analyst Markus Thielen believes that the Securities and Exchange Commission (SEC) will decline all bitcoin spot ETF proposals in January, going against the general market consensus. Despite recent meetings between filers and the SEC, Thielen argues that these applications still fail to meet a critical requirement for approval. He suggests that SEC Chair Gensler is not embracing the crypto industry and is focused on stricter compliance. Thielen expects the SEC to reject all proposals this month, which could result in cascading liquidations and a sharp drop in bitcoin’s price by around 20%.
What happens if bitcoin spot ETFs are rejected?
The rejection of bitcoin spot ETF applications could lead to cascading liquidations and a significant drop in bitcoin’s price. Thielen anticipates that billions of dollars in perpetual long bitcoin futures would unwind, causing the price to plummet back into the $36,000 to $38,000 range. Currently trading at $44,562, bitcoin has seen a 5% increase since the start of the year and a 65% increase over the past three months.
Hot Take: Thielen remains bullish on bitcoin’s long-term prospects despite potential volatility
Although there may be short-term volatility if the SEC rejects the bitcoin spot ETF proposals, Thielen maintains a bullish outlook for 2024. Drawing on historical patterns and Bitcoin mining cycles, Matrixport predicts that bitcoin’s value will surpass its starting point of $42,000 by the end of the year. This offers a silver lining for long-term investors amidst regulatory uncertainties.
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