SEC Set to Reject Bitcoin Spot ETF Proposals: Matrixport Report

• Matrixport Predicts SEC to Reject Bitcoin Spot ETF Applications
• SEC Chair Gensler's Stance on Crypto
• Political Implications and Market Impact
• Market Movements and Expectations

Matrixport Predicts SEC to Reject Bitcoin Spot ETF Applications

Matrixport, a provider of crypto investment services, anticipates that all applications for a spot bitcoin exchange-traded fund (ETF) will be denied by the U.S. Securities and Exchange Commission (SEC) this month. Their statement on Wednesday highlighted the Democratic majority in the five-person commission whose votes are crucial for ETF approval.

SEC Chair Gensler's Stance on Crypto

Matrixport pointed towards SEC Chair Gensler's unenthusiastic stance towards crypto within the U.S. They noted that hopes for Gensler voting in favor of bitcoin spot ETFs may be far-fetched. Gensler's comments in December 2023 indicated that he perceives the crypto industry as needing stricter compliance.

Political Implications and Market Impact

According to Matrixport, the approval of a bitcoin spot ETF, while potentially propelling the crypto industry, is unlikely due to political factors. The firm believes that a spot ETF approval would inherently legitimize Bitcoin$42,260 -0.64% as an alternate store of value, which is not politically favorable. This anticipation of a spot BTC ETF approval in the U.S. contributed to Bitcoin's price surge, unseen since April 2022, and a 160% increase in value by the end of 2023.

Market Movements and Expectations

Matrixport also estimated that out of the additional $14 billion of fiat and leverage channelled into crypto since September, $10 billion might be attributable to the anticipation of an ETF. However, Bitcoin's value dropped nearly 7% to $42,445 in a matter of minutes around 12:00 UTC.

Edited by Jonathan Stoker