The SEC will again reject a Bitcoin spot ETF, Matrixport reports.
The SEC is set to reject a Bitcoin spot ETF again. The Matrixport report first appeared on Coinpedia.
In a recent report, Matrixport, a prominent cryptocurrency finance platform, published a report predicting that the U.S. Securities and Exchange Commission (SEC) is likely to reject Bitcoin spot ETFs again. According to this forecast, the Bitcoin price could fall -20% and stabilize within the $36,000-$38,000 range.
Bitcoin Spot ETF Rejected
According to Matrixport’s latest report, the possibility of the SEC denying approval to a Bitcoin spot ETF challenges high expectations within the cryptocurrency community.
In the event of such a rejection, Matrixport anticipates significant consequences, including a cascading liquidation, particularly within the additional $5.1 billion of perpetually long Bitcoin futures. A possible -20% drop in Bitcoin price could quickly push it back into the $36,000 to $38,000 range.
As the January 5, 2024 deadline approaches without a green light, Matrix on Target suggests a defensive strategy for traders. This includes hedging long-term exposure by purchasing a $40,000 strike put option in late January or considering an outright short position in Bitcoin through options.
Price falls despite approval
While many expect the approval of a Bitcoin ETF to trigger a price surge, Matrixport’s insight sparks discussion about a price correction. However, concerns are also raised that ETFs could become subject to short selling, potentially increasing volatility or even turning into a ‘news selling event’.
Moreover, a green light for Bitcoin ETFs could lead to increased regulatory scrutiny across cryptocurrency markets. This increased oversight could result in increased taxation, reporting requirements and potential usage restrictions for Bitcoin, potentially dampening investor enthusiasm.
Some market observers argue that the market may have already considered the possibility of Bitcoin ETF approval. If rejected, disappointment could ensue, reminiscent of the sell-off seen in 2017 when the Winklevoss Bitcoin ETF faced rejection.
Meanwhile, the SEC’s final ruling is a significant moment, and its aftermath will undoubtedly shape Bitcoin’s story going forward.
