The U.S. Securities and Exchange Commission (SEC) might end up rejecting all applications for a spot Bitcoin exchange-traded fund (ETF) because they fall short of a critical requirement, digital asset management firm Matrixport wrote in a Jan. 3 note. <\/p>\n
This comes a day after Matrixport said Bitcoin could pump to $50k before the weekend. <\/p>\n
Instead, the firm stated that the regulator might approve these applications by this years second quarter. <\/p>\n
The platform pointed out that SEC Chair Gary Genslers attitude towards crypto remains negative as he has consistently noted the industrys lack of compliance. <\/p>\n
According to the firm, Genslers consistent emphasis on the industrys regulatory compliance gaps signals a potential vote against the ETF, which could otherwise catalyze widespread investment in crypto. <\/p>\n
An ETF would certainly enable crypto overall to take off, and based on Genslers comments in December 2023, he still sees this industry in need of more stringent compliance, Matrixport said. <\/p>\n
Matrixport further highlighted that most voting commissioners approving such funds align with the Democratic party, a faction known for harboring anti-crypto sentiments. Notably, figures like Senator Elizabeth Warren, a prominent Democrat, have drawn criticism from stakeholders due to her less favorable stance on the crypto space. <\/p>\n
Additionally, Matrixport emphasized that the regulatory authorities lack political incentives to greenlight a spot ETF, which would confer legitimacy upon Bitcoin as an alternative store of value. This absence of motivation raises doubts about the likelihood of swift approval by regulatory bodies. <\/p>\n
This prediction contradicts the general sentiments in the market, with several observers suggesting that the regulator might approve the various pending applications by the end of the week. <\/p>\n
Matrixport stated that BTCs price could fall to as low as $36,000 if the SEC rejected the applications. <\/p>\n
If there is any denial by the SEC, we could see cascading liquidations as we expect most of the $5.1 billion in additional perpetual long Bitcoin futures to be unwound. We could see Bitcoin prices declining by -20% very quickly and falling back to the $36,000\/$38,000 range, Matrixport added. <\/p>\n
Due to this, the firm advised investors to hedge their long exposure by buying the $40,000 strike puts for the end of January or even taking short positions against the assets price. <\/p>\n
At the time of press, Bitcoin is ranked #1 by market cap and the BTC price is down 5.99% over the past 24 hours. BTC has a market capitalization of $836.57 billion with a 24-hour trading volume of $41.37 billion. Learn more about BTC <\/p>\n
BTCUSD Chart by TradingView <\/p>\n
At the time of press, the global cryptocurrency market is valued at at $1.64 trillion with a 24-hour volume of $97.84 billion. Bitcoin dominance is currently at 51.14%. Learn more <\/p>\n
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Bitcoin's price risk slumping to $36k if SEC denies ETF applications, Matrixport warns - CryptoSlate<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" The U.S. Securities and Exchange Commission (SEC) might end up rejecting all applications for a spot Bitcoin exchange-traded fund (ETF) because they fall short of a critical requirement, digital asset management firm Matrixport wrote in a Jan. 3 note. Continue reading