[NEWS] SEC may reject Bitcoin spot ETF - Matrixport releases report

Matrixport, a cryptocurrency analysis company, released its latest report on the 3rd, stating that the U.S. Securities and Exchange Commission (SEC) will not approve all Bitcoin spot ETFs.

Following this report, the price of Bitcoin (BTC) plummeted. On the 3rd, it temporarily fell to about $40,500 (approximately 5.88 million yen). The price of altcoins also fell sharply due to the impact of Bitcoin's fall, causing the cryptocurrency market to fluctuate wildly at the beginning of the year.

At the time of writing, Bitcoin had risen to $44,000 (approximately 6.4 million yen), returning to the level before the sudden drop.

Matrixport analyzed on the 2nd that if a Bitcoin spot ETF is approved, institutional investors will invest in it and Bitcoin will rise to $50,000 (approximately 7.26 million yen).

Many analysts and others predicted that a Bitcoin spot ETF would be approved between the 5th and the 10th. Some analysts predict that if it is actually approved, it will bring in $24 billion to $50 billion. It was also predicted that the price of Bitcoin would rise further around the expected halving in March and April, as new issuance will decrease.

According to Matrixport, all of the Bitcoin spot ETFs currently being applied for do not meet the SEC's standards. As a result, they said that the possibility of the application being approved in January is low, and that it will likely be approved in the second quarter (April to June).

They also pointed out that the approval of a Bitcoin spot ETF involves political issues. SEC Chairman Gary Gensler commented in December last year that "the industry needs stricter compliance." Taking these comments into account, they analyzed that from a political perspective, there is no reason to approve a Bitcoin spot ETF, which would justify Bitcoin as an alternative means of value.

Non-approval may result in the liquidation of long positions worth approximately 740 billion yen

According to Matrixport, investors poured $14 billion (approximately 2.4 trillion yen) into the cryptocurrency market in September last year. While stating that this movement is related to the impact of the Federal Reserve's (Fed) turning dovish, it points out that $10 billion (approximately 1.45 trillion yen) of the $14 billion is in anticipation of the approval of a Bitcoin spot ETF.

On the other hand, if the SEC decides to not approve a Bitcoin spot ETF, it is likely that the long positions worth $5.1 billion (approximately 740 billion yen) invested in Bitcoin futures will be liquidated. As a result, it said that the price of Bitcoin could fall by about 20%.

However, even if the SEC does not approve a Bitcoin spot ETF, the US presidential election in November and Bitcoin's halving are likely to have a positive effect, so it is expected that the price will be higher than the $42,000 (approximately 6.1 million yen) at the beginning of the year by the end of 2024.

Reference:Report
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