In the dynamically changing world of cryptocurrencies, each new piece of information can cause significant market changes. The recently published Matrixport report has shed new light on the future of the two most well-known digital currencies – Bitcoin and Ethereum. The surprising content of the report, concerning the potential rejection by the Securities and Exchange Commission (SEC) of applications for Bitcoin ETFs, caused an unexpected drop in their value.
In the world of cryptocurrencies, where any move by regulators can trigger a wave of changes, the latest news from the analytics firm Matrixport has introduced new tension. The report suggests that the American SEC may reject all 12 applications for Bitcoin-based ETFs awaiting approval.
The analysis of the reasons for the SEC’s stance points to gaps in meeting key requirements by the issuers of these funds. Nevertheless, Matrixport analysts do not rule out that these requirements could be met in the second quarter of 2024, which would pave the way for potential ETF approval.
The political context of the SEC’s decision is also an interesting aspect. The dominance of Democrats in the five-member committee of SEC commissioners, whose votes are crucial for ETF approval, and the cautious approach of SEC Chairman Gary Gensler towards cryptocurrencies, may further delay the introduction of Bitcoin-based ETFs to the US market.
The Matrixport report predicts that in the event of ETF application rejections, Bitcoin could significantly lose value, fluctuating in the range of $36,000-$38,000. In light of the potential rejection, analysts advise traders to hedge their positions, which could mean buying put options on Bitcoin or even taking a direct short position in the market.
Despite short-term challenges, the report also contains optimistic forecasts. Analysts believe that the price of Bitcoin could rise in 2024, mainly due to upcoming events such as the Bitcoin halving and US presidential elections.
The reaction of the cryptocurrency market to these reports should not be overlooked. Bitcoin recorded an 8 percent drop to $40,000, although it later rebounded slightly. Ethereum also recorded a drop in value. Data from CoinGlass shows that in the last hour, traders in long positions have incurred losses of approximately $462 million on major cryptocurrency exchanges.
The conclusions from the Matrixport report cast new light on the future of cryptocurrencies, especially Bitcoin and Ethereum. The uncertainty around the SEC’s decision may affect short-term price fluctuations, but long-term prospects remain promising. In such a volatile environment as the cryptocurrency market, every new piece of information is crucial for investors and digital currency enthusiasts.
