Matrixport Report Claims US SEC Will Reject Spot Bitcoin ETFs, Sparking Crypto Market Concerns
On Wednesday, a report from Matrixport sent shockwaves through the crypto world, claiming that the US Securities and Exchange Commission (SEC) will “reject” spot bitcoin exchange-traded funds (ETFs). This news resulted in an 8% drop in the price of bitcoin. According to the report, there is no political reason for the SEC to approve a bitcoin spot ETF, as it would legitimize bitcoin as an alternative store of value. However, Bloomberg Intelligence analyst Eric Balchunas questioned the report’s lack of sourcing, stating that it doesn’t align with what Bloomberg Intelligence has been reporting.
Bloomberg Intelligence Analyst Disputes Matrixport Report, Questions Lack of Sourcing
Balchunas expressed skepticism about the Matrixport report, pointing out that without any sourcing, it is difficult to verify the claims made. He stated that if there is sourcing backing up the report, it would be a “whole different ballgame.” Balchunas emphasized that the report overturns a lot of what has been reported and would go against the work and signaling from the SEC staff. Matrixport has not provided any comment on the sourcing of the report at this time.
Matrixport Report Suggests Democrat-Dominated SEC Leadership Panel Unlikely to Approve Bitcoin ETFs
The Matrixport report claimed that the current leadership panel at the SEC, which would vote on a spot bitcoin ETF approval, is “dominated by Democrats.” The report suggests that SEC Chair Gary Gensler is not embracing crypto and would be unlikely to vote in favor of approving bitcoin spot ETFs. The report argues that Gensler still sees the crypto industry as needing more stringent compliance measures. However, the report’s claims are out of consensus and not based on insider comments or issuer information, according to Markus Thielen, head of research at Matrixport.
Analysts Remain Bullish on Spot Bitcoin ETF Approval, Citing Cash-Only Creations and Grayscale Ruling
Despite the Matrixport report, analysts from Bloomberg Intelligence remain confident in their prediction that the SEC is likely to approve spot bitcoin ETFs. They believe there is a 90% chance of approval in the days leading up to January 10, which is the deadline for Ark Invest’s bitcoin spot ETF. Balchunas and his colleague James Seyffart have based their prediction on the recent amendments filed by potential issuers and the Grayscale court ruling. The judges ruled in favor of Grayscale’s application to convert its Bitcoin Trust to an ETF, which suggests that the SEC is ready to approve spot bitcoin ETFs.
SEC Approval of Spot Bitcoin ETFs Unlikely in January, Matrixport Report Predicts
Contrary to the predictions of Bloomberg Intelligence analysts, the Matrixport report claims that the SEC is unlikely to approve spot bitcoin ETFs in January. The report argues that all the current applications fall short of a critical requirement that must be met before approval. The report suggests that this requirement may be fulfilled by Q2 2024. However, Matrixport expects the SEC to reject all proposals in January. Balchunas considers this a delay rather than a rejection if the SEC states that there is one issue holding up approval. Ark Invest CEO, Cathie Wood, acknowledges the uncertainties surrounding SEC approval but believes the probabilities of approval have increased.
Analyst comment
Positive news: Bloomberg Intelligence analysts remain bullish on spot Bitcoin ETF approval, citing cash-only creations and the Grayscale ruling as evidence of the SEC’s readiness to approve them. They predict a 90% chance of approval by January 10.
Neutral news: Matrixport report claims that the SEC will reject spot Bitcoin ETFs, causing concerns in the crypto market. The report suggests a Democrat-dominated SEC leadership panel is unlikely to approve them due to concerns about compliance measures.
As an analyst, it is difficult to predict the exact outcome, but there seems to be uncertainty surrounding SEC approval. While Bloomberg Intelligence analysts are confident in approval, the Matrixport report presents potential obstacles. The market may experience further volatility as investors wait for a definitive decision from the SEC.
