The SEC will say no to Bitcoin Spot ETFs plans, says Matrixport on Jan, 2024.

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Understanding Bitcoin ETFs Explained Simply

Bitcoin Spot ETFs (Exchange-Traded Funds) are investment funds made to follow how well Bitcoin, the first and most famous cryptocurrency, is doing. These funds are a lot like regular ETFs as they sell portions of the fund to people who want to invest through public markets.

Key Points about Bitcoin Spot ETFs

Investing in Bitcoin-Related Stuff: Bitcoin Spot ETFs mainly invest in things connected to Bitcoin. This might include actually owning Bitcoin, deals about Bitcoin’s future prices, or shares from companies dealing with Bitcoin.
Shares Sold on Stock Markets: Bitcoin Spot ETFs create pieces of the fund that investors can buy and sell on stock exchanges, just like regular stocks. These pieces represent how much of the fund’s assets you own.
Building a Mix of Investments: Bitcoin ETFs use the money they get from selling pieces to make a mix of things they invest in. This mix could copy a market index, focus on a specific part of the stock market, or, in this case, follow stuff related to cryptocurrencies like Bitcoin.
Investing Without Active Management: Some ETFs aim to copy how well Bitcoin or the overall cryptocurrency market is doing without actively deciding what to invest in.
Easy Access and Mix of Investments: ETFs make it easy for people to join in on Bitcoin’s success without actually owning or handling Bitcoin. Plus, they give a mix of different Bitcoin-related assets, spreading the risk.
Need for Approval: For a Bitcoin ETFs to start trading, it needs the thumbs-up from regulators like the U.S. Securities and Exchange Commission (SEC). These regulators check how the ETF is set up and if it follows the rules before it can be traded on public markets.

In short, Bitcoin ETFs let people get a piece of Bitcoin’s success without owning Bitcoin directly. They make it easy to invest, give a mix of investments, and follow the rules set by regulators for those who want to invest in cryptocurrencies using traditional financial markets.

Why the SEC Won’t Approve Bitcoin Spot ETFs?

Summary

How SEC Decisions Affect Bitcoin Predictions

Matrix on Target, a forecasting company, has been positive about Bitcoin in 2023, predicting it could reach $45,000 by Christmas and maybe even $50,000 by January 2024 if special investment plans were allowed. But despite many talks between the people wanting these plans and the SEC, Matrix on Target thinks the plans don’t meet what the SEC needs to say “yes.” They think maybe by the middle of 2024, the requirements might be met, but for now, they expect the SEC to say “no” in January.

Impact of SEC Leaders and Gensler’s Thoughts on Crypto

The SEC has five important people who decide on these plans, mostly from one political group called the Democrats. The head of the SEC, Gensler, isn’t very excited about cryptocurrencies in the US. This makes people doubt if he’ll agree to these special Bitcoin plans. Gensler wants strict rules for the industry, showing he’s not keen on making Bitcoin a trusted value alternative.

What Could Happen and Suggestions

Since people started hoping for these plans in September 2023, around $14 billion has gone into cryptocurrencies. A lot of this money, about $10 billion, is because people expect the special plans to get approved. If the SEC says “no,” many people might sell their Bitcoin investments, leading to a quick drop in Bitcoin’s value by about -20%, down to $36,000/$38,000.

Matrix on Target suggests that if by January 5, 2024, there’s no news about approvals, investors should protect themselves by buying options that say Bitcoin will be worth $40,000 by the end of January. They also say investors might want to bet on Bitcoin losing value using options.

Future Prediction for Bitcoin’s Price

Even if the special plans are rejected, Matrix on Target thinks Bitcoin’s price will still be higher by the end of 2024 than at the start of the year ($42,000). They believe this is because of patterns in US election years and how Bitcoin is made, which usually make the price go up.

SEC Chair Gensler’s Views on Cryptocurrency in the US

Matrixport, a company that helps people invest in cryptocurrency, thinks that the U.S. Securities and Exchange Commission (SEC) will say “no” to every request to make a special kind of investment fund for bitcoin this month. The company says the people in charge of the SEC are really important when deciding on these kinds of funds.

Most SEC Leaders Are Democrats

Matrixport says that the people who vote on these decisions at the SEC mostly belong to one political group called the Democrats. They believe this could have a big impact on whether they approve funds for bitcoin or not.

What Gensler Thinks About Crypto

Matrixport also says that the person in charge of the SEC, Gensler, isn’t a big fan of cryptocurrencies in the United States. In fact, they think he doesn’t like them much at all and might not agree to approve these special bitcoin funds.

What It Means for Bitcoin Funds

Matrixport thinks it’s unlikely that the SEC will say “yes” to these special investment funds for bitcoin right now. This is because most of the people making the decisions belong to one political group, and the person in charge doesn’t seem to like cryptocurrencies much. So, it might be tough for these special bitcoin funds to get approved soon.

How Approving an ETF Could Impact Crypto and Gensler’s Opinion

Matrixport thinks that saying “yes” to an ETF (Exchange-Traded Fund) for Bitcoin could really boost the entire cryptocurrency market. They talk about what Gensler said in December 2023, indicating he still believes the crypto industry needs stricter rules. Matrixport’s point is that from a political standpoint, there isn’t a good enough reason to give the go-ahead for a Bitcoin ETF because it would make Bitcoin more accepted as a valuable asset.

Rise in Bitcoin’s Price and Investment Increase

People thought the U.S. would approve a special ETF for Bitcoin, and this made Bitcoin’s price shoot up, reaching levels not seen since April 2022. By the end of 2023, Bitcoin had gone up by almost 160%. Matrixport guesses that out of the extra $14 billion put into crypto since September, around $10 billion was because people were hoping for this special investment fund.

Bitcoin’s Current Price and Market Changes

Right now, the value of Bitcoin has dropped by nearly 7%, and it’s priced at $42,445. This sudden drop happened in just a few minutes around 12:00 UTC.

Different Opinions and Criticism

The person in charge of research at Galaxy Digital, Alex Thorn, strongly disagreed with Matrixport’s report, calling it confusing and not making sense. Galaxy Digital, working together with Invesco, is one of many groups asking the SEC to approve a special Bitcoin investment fund.

bewildering note from matrixport

several of their supporting arguments are nonsensical

3 of their most confusing & questionable claims:

👉🏼 that the bull run was kicked off by franklin templeton’s september ETF filing. they write: “there was now more than one big traditional…
— Alex Thorn (@intangiblecoins) January 3, 2024

In simple terms, Matrixport thinks approving a Bitcoin ETF could make a big positive difference in the crypto world. On the other hand, Galaxy Digital disagrees and is working hard to get approval for a Bitcoin ETF from the SEC.

A Bitcoin ETF Might Get Approved Soon!

People in the cryptocurrency world are really hopeful that the United States might approve a Bitcoin Exchange-Traded Fund (ETF) very soon. They’re feeling this way because of some recent happenings and they think there’s about a 98% chance it’ll happen. If this approval goes through, it could cause the value of Bitcoin to go up a lot. Here are the main reasons why everyone’s so excited:

High Chance of Approval: 98%

Experts who study this stuff think there’s a very big chance, around 98%, that the U.S. will say yes to a Bitcoin ETFs soon.
They’re feeling confident because a bunch of things are looking good, which makes it seem like the authorities might agree.

Expected Timeline: Next Few Weeks

People are guessing that the decision about the Bitcoin ETFs could come in the next few weeks, maybe by January 10th.
This timeline has gotten a lot of people in the cryptocurrency community really excited and hopeful that things will turn out well.

What Might Happen in the Market: A Big Bitcoin Jump

If this ETF does get approved, most folks think it’ll make the value of Bitcoin shoot up.
People believe that the approval of a Bitcoin ETFs in the U.S. will make others trust it more and might get bigger investors interested. This could make Bitcoin’s price go way up.

Reasons Why Approval Seems Likely

Recent changes in how things are going in the market and what regulators are saying make it seem like the ETFs approval is more likely.
The rules around digital money are changing, and more people are accepting it. This makes it seem like a Bitcoin ETFs could get approved soon.

So, in short, lots of people in the cryptocurrency world are really positive that there’s a 98% chance the U.S. will approve a Bitcoin Spot ETFs by January 10th. This hopefulness is because of recent developments. If it happens, Bitcoin’s value might soar, getting bigger investors interested and making the whole cryptocurrency market more exciting.