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Matrix on Target, with its insightful foresight, defied consensus expectations throughout 2023 by boldly predicting Bitcoin’s surge to $45,000 by Christmas. The anticipation went further, suggesting a potential rally towards $50,000 by the end of January 2024 if all the SEC requirements for Bitcoin Spot ETFs were met. However, recent developments in meetings between ETF applicants and SEC staff, leading to refiling applications, have raised doubts about the feasibility of approval.
Despite ongoing discussions and revisions in applications, Matrix on Target holds a firm belief that a crucial requirement remains unfulfilled, posing a hurdle for SEC approval. While there might be a chance of meeting this requirement by Q2 2024, pessimism prevails, anticipating a rejection of all proposals in January.
The current leadership of the SEC, comprising five voting Commissioners, is predominantly Democrat. SEC Chair Gensler, known for his cautious approach to crypto, raises skepticism about approving Bitcoin Spot ETFs. Gensler’s recent remarks in December 2023 suggest a perceived need for more stringent compliance within the crypto industry. Politically, legitimizing Bitcoin as an alternative store of value may not align with current sentiments.
Since traders began anticipating ETF approval in September 2023, an influx of at least $14 billion in fiat and leverage has been witnessed in the crypto market. While some of this surge may be attributed to macroeconomic conditions favoring crypto, a significant portion, estimated at $10 billion, is linked to the optimistic expectation of ETF approval.
In the event of an SEC denial, Matrix on Target anticipates cascading liquidations, especially concerning the $5.1 billion in additional perpetual long Bitcoin futures. This could result in a rapid decline of Bitcoin prices by approximately -20%, reverting to the $36,000/$38,000…
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