Matrixport Report Casts Doubt on Approval of Bitcoin ETF
On January 3, a report released by Matrixport, a Bitcoin mining company and crypto financial services firm, raised concerns about the approval of a Bitcoin exchange-traded fund (ETF) by the United States Securities and Exchange Commission (SEC). The report, intended for Matrixport clients, suggested that the current leadership of the SEC, which is dominated by Democrats, is unlikely to embrace crypto and approve spot Bitcoin ETFs. The founder of Matrixport, Jihan Wu, later clarified that the report’s dissemination was not planned by the company and was beyond their control.
Bitcoin Price Plummets as Investors React to Matrixport Report
The release of the Matrixport report coincided with a significant sell-off in the crypto market, particularly in the price of Bitcoin. On January 3, the price of Bitcoin dropped by more than 10% to $40,800 before recovering. Many attributed this price action to the concerns raised in the report about the potential rejection of spot Bitcoin ETF proposals. The market reaction highlighted the sensitivity of investors to news and speculation surrounding the approval of Bitcoin ETFs, as they have the potential to attract significant investment into the cryptocurrency.
Jihan Wu Dismisses Matrixport’s Role in Bitcoin Sell-off
Despite the coincidence of the Matrixport report and the Bitcoin sell-off, Jihan Wu, the founder of Matrixport, emphasized that the report was not responsible for the price drop. Wu pointed to other factors such as high funding fees in Bitcoin perpetual markets and a recent pullback in crypto-related stocks. He stated that Matrixport analysts operate independently and express their opinions without any influence or interference from management. Wu also expressed confidence in the future prospects of Bitcoin and the inevitability of a Spot ETF approval by the SEC.
Matrixport Analysts Predict Rejection of Spot Bitcoin ETF
The analysis provided by Matrixport’s report suggested that the current composition of the SEC leadership, along with Chair Gensler’s stance on crypto, makes it unlikely for spot Bitcoin ETFs to receive approval in January 2024. The report cited the dominance of Democrats among the five-person voting Commissioners and Gensler’s lack of enthusiasm for cryptocurrencies as factors that may hinder the approval process. However, it is important to note that the analysts’ opinions expressed in the report are separate from the company’s management and reflect their own independent analysis.
Jihan Wu Asserts Bitcoin ETF Approval is Inevitable
Despite the skepticism expressed in the Matrixport report, Jihan Wu remains confident in the approval of a Bitcoin spot ETF by the SEC. Wu believes that the approval of a Bitcoin ETF will attract fresh investment into the cryptocurrency and considers it to be inevitable. He disregards the current volatility and the uncertainty surrounding the approval process, stating that they are ultimately of no importance. Wu’s assertion highlights his optimistic outlook for Bitcoin’s future and its potential for further growth and mainstream adoption.
Related: Bitcoin ETF denial report did not cause 8% BTC price crash — Analysis
Analyst comment
The news can be evaluated as negative as the Matrixport report raises doubts about the approval of a Bitcoin ETF by the SEC, leading to a significant sell-off in the crypto market. However, Jihan Wu dismisses the report’s role in the sell-off and asserts that Bitcoin ETF approval is inevitable. The market may experience short-term volatility, but the long-term prospects of Bitcoin and its potential for growth and mainstream adoption remain positive.
