Matrixport analyst Markus Thielen predicts that the Securities and Exchange Commission (SEC) will reject all bitcoin spot ETF proposals in January.
Key Takeaways
- Matrixport analyst Markus Thielen forecasts the rejection of all bitcoin spot ETF proposals by the SEC in January.
- Thielen identifies a critical requirement lacking in the applications, hindering SEC approval despite recent meetings and updated prospectuses.
- SEC Chair Gensler’s cautious approach to crypto and the perceived need for stricter compliance in the industry influence Thielen’s prediction.
- In the event of rejection, Thielen anticipates cascading liquidations and a potential 20% decline in Bitcoin’s price to the $36,000 to $38,000 range.
SEC Rejection of Bitcoin Spot ETFs
In a departure from the broad market consensus, Matrixport analyst Markus Thielen has voiced a contrarian perspective on the fate of bitcoin spot ETF proposals currently before the Securities and Exchange Commission (SEC). Thielen anticipates that, despite recent interactions between filers and the SEC, all bitcoin spot ETF applications will face rejection in January.
SEC will reject all bitcoin spot ETFs in January, says Matrixport analyst https://t.co/F4roqJOQOY
— The Block (@TheBlock__) January 3, 2024
Thielen underscores a fundamental deficiency in the applications, arguing that they do not meet a crucial requirement necessary for SEC approval. Despite ongoing discussions and updated S-1 prospectuses, the analyst believes that compliance concerns and political dynamics remain stumbling blocks to regulatory acceptance.
SEC Chair’s Stance
Central to Thielen’s prediction is SEC Chair Gensler’s cautious approach to the cryptocurrency industry. Gensler, according to Thielen’s analysis, views the sector as necessitating more stringent compliance measures before embracing the concept of a bitcoin spot ETF. The analyst suggests that this cautious stance may persist, with approval potentially delayed until Q2 2024.
Market Repercussions
In the event that Thielen’s prediction materializes and the SEC rejects the bitcoin spot ETF applications, he expects significant market repercussions.
Cascading liquidations are foreseen, potentially unwinding billions of dollars in perpetual long bitcoin futures. This scenario could lead to a substantial 20% decline in Bitcoin’s price, revisiting the $36,000 to $38,000 range.
To Conclude
Markus Thielen’s forecast of the SEC rejecting all bitcoin spot ETF proposals in January introduces a notable contrarian perspective. Focused on compliance concerns, political dynamics, and SEC Chair Gensler’s cautious stance, Thielen predicts potential market consequences, including cascading liquidations and a significant drop in Bitcoin’s price if the anticipated rejection becomes reality.
