Matrixport Issues Warning on Potential Rejection of Bitcoin Investment Funds by SEC
Matrixport, a leading platform in cryptocurrency financial services, has released a report cautioning investors about the possibility of the United States Securities and Exchange Commission (SEC) rejecting all Bitcoin (BTC) exchange-traded investment funds in January.
The report indicates that final approval might not be secured until the second quarter of 2024. Matrixport’s analysis also forecasts a significant drop in Bitcoin’s price, recommending investors consider selling or directly liquidating their Bitcoin holdings. Contradicting consensus expectations, the report emphasizes the likelihood of the SEC rejecting all pending immediate Bitcoin investment fund applications.
Notably, major financial institutions such as BlackRock, Fidelity, Ark Invest, and VanEck have submitted requests for Bitcoinspot ETFs, awaiting approval from the SEC. Simultaneously, Matrixport highlights recurring meetings between applicants from the European Training Institute and SEC personnel. These interactions have led applicants to resubmit their requests.
According to Matrixport, all applications lack meeting critical requirements necessary for SEC approval. They suggest these criteria might be met by the second quarter of 2024. However, the SEC is expected to reject all proposals in January.
Political Landscape of the SEC
The recent report underscores the political landscape within the Securities and Exchange Commission, suggesting that the current five-person voting commissioners, led by Democrats, could influence decisions. SEC Chairman Gary Gensler’s stance on cryptocurrencies remains uncertain, given his non-adoption stance towards cryptocurrencies in the United States.
This, according to Matrixport, indicates a potential reluctance to approve traded Bitcoin investment funds. The report notes Gensler’s view that the cryptocurrency industry requires stricter compliance, making approval of a Bitcoin exchange-traded fund unlikely. The potential rejection of Bitcoin ETFs could have significant market repercussions.
Matrixport estimates nearly $14 billion in additional securities and leveraged finance have been issued in the cryptocurrency market since traders speculated on European Training Institute approval in September 2023. If the SEC rejects approval, the report anticipates successive liquidation events, possibly resulting in a 20% rapid decline in Bitcoin’s price, returning to the range of $36,000 to $38,000.
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Despite the potential rejection of the traded investment fund, Matrixport remains optimistic about Bitcoin’s long-term prospects. They still anticipate Bitcoin surpassing its starting point for the year ($42,000) by the end of 2024. However, the latest report indicates a shift in their perspective.
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