Matrixport Anticipates SEC Rejection of Bitcoin ETFs, Advises Traders to Brace for Impact

Bits Logics Team . 03rd Jan 2024

• Matrix on Target has taken a bold stance by predicting the impending rejection of all Bitcoin Spot ETF proposals by the SEC.
• SEC’s five-person voting commissioners are highlighted as a potential hurdle for the approval of Bitcoin Spot ETFs. 
• BTC is priced at $42,491.94 after facing a 6.93% fall in one day.

Matrix on Target has taken a bold stance by predicting the impending rejection of all Bitcoin Spot ETF proposals by the Securities and Exchange Commission (SEC). In their executive summary, the firm suggests that despite numerous meetings between ETF applicants and SEC staff, all applications “fall short of a critical requirement” necessary for approval.

According to the report, the current composition of the SEC’s five-person voting commissioners, where Democrats hold sway, is highlighted as a potential hurdle for the approval of Bitcoin Spot ETFs. SEC Chair Gensler, perceived as not favorably disposed towards cryptocurrencies, is considered a long shot for endorsing such ETFs. Moreover, Gensler’s recent remarks in December 2023 indicate a belief in the industry’s need for more stringent compliance, raising doubts about his support for crypto-related financial products.

In the wake of widespread anticipation and market optimism since September 2023, with traders banking on an ETF approval, Matrix on Target underscores the possibility of cascading liquidations in the event of an SEC rejection. The firm estimates that of the $14 billion deployed into crypto, $10 billion is directly linked to the expectation of ETF approval.

As the January 5, 2024, deadline approaches with no apparent approval signals, Matrix on Target is urging caution. The firm recommends that traders hedge their long exposure by acquiring $40,000 in strike puts for the end of January or even consider outright short positions in Bitcoin through options.

However, even in the face of potential SEC denial, Matrix on Target maintains a positive outlook for Bitcoin in the long term. The firm expects Bitcoin prices to surpass the starting point of $42,000 by the end of 2024, citing historical trends where US election years and Bitcoin mining years have historically yielded positive outcomes.

According to CoinMarketCap, BTC is priced at $42,491.94 after facing a 6.93% fall in one day. Additionally, the leader of cryptos also faced a 0.91% tumble over the seven day period, making its market cap valued at $832,589,713,922 at the reported time.