Latest update on spot BTC ETF says that a cryptocurrency financial services platform, Matrixport, has made a bold forecast indicating that Exchange Traded Funds (ETFs) that track Bitcoin spot prices won’t be approved by the U.S. Securities and Exchange Commission (SEC) in January.
This prediction is made amid increased excitement in the cryptocurrency world over the possible approval of Bitcoin ETFs. Since September 2023, traders and investors have been making active guesses about whether a Bitcoin ETF will be approved.
This speculation has resulted in a significant inflow of leverage and fiat capital into the market, totalingbout $14 billion. Matrixport said that the current leadership management presiding over the spot ETF approval at SEC is made up of a team of five-person voting Commissioners, which is mainly made up of Democrats.
Market Reacts to Matrixport’s Predictions, Trades Carefully
The market becomes more uncertain due to Matrixport’s prediction, which forces traders to review their holdings and think through possible hedging techniques. The proposed approval is expected to provide more clearance for a spot Bitcoin ETF, which may affect market dynamics and short-term price fluctuations in the cryptocurrency industry.
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Gary Gensler, the SEC’s chairman, has expressed the hostility experienced in the cryptocurrency sector and doubts the likelihood of supporting spot BTC ETF approval. In December 2023, Gensler remarked that the cryptocurrency needs to increase its compliance with rigid regulatory standards. He also stated that some incentives in place for the approval of the spot BTC ETF. He said this will validate the cryptocurrency as a strong value storage alternative.
Reports Reveals How Traders Have Been Optimistic Since 2023
The SEC’s position on Bitcoin ETFs has been the focus of constant analysis and investigation. Amid potential benefits of ETFs in giving the cryptocurrency market accessibility and legitimacy are becoming more widely acknowledged, the SEC has taken a cautious approach due to regulatory concerns about market manipulation and investor protection. However, traders started betting on ETF approval in September 2023.
This has led to a major influx of $14 billion of fiat currency, and some leverages have also been moved into the market. Some portions of these capital inflows are linked to more positive macroeconomic situations that result from the Federal Reserve. The report also stated that out of $14 billion in extra long positions, about $10 billion is slated for the ETF approval.
Many Future Failures Lay Around the ETF Approval, Report Warns
The predictions made by Matrixport add another level of complication to the ongoing debates around approving Bitcoin ETFs. Due to possible market reactions to regulatory actions, traders and other market participants are advised to use caution and implement risk management techniques.
The latest report expects many future failures of liquidations. This is expected to happen so much that the extra $5.1 billion in the proposed Bitcoin futures may be released. This development is also likely to lead to a 20% decrease in the price of BTC, compelling a reversion in price to $36,000 or $38,000.
Matrixport has advised traders that if SEC approves the project on Friday, January 5, they should endeavor to hedge their assets at 40,000 position and prepare for the end of January. It also advised that we should consider a short position on the BTC immediately via some available options.