Bitcoin's price experienced a 7% drop following a bearish report from Matrixport suggesting that the SEC is likely to reject all Bitcoin Spot ETF applications in January, contrary to some expectations of approval. The market's high leverage and long positions exacerbated the impact, leading to significant liquidations. Despite the report's grim outlook, some analysts, including Vetle Lunde and Bloomberg's Eric Balchunas, disagree with the prediction, citing recent developments that make a denial seem unlikely. The debate continues among analysts on social media platforms.
Matrixport predicts that the U.S. Securities and Exchange Commission (SEC) will reject all spot bitcoin ETF applications, citing the Democratic majority among the Commissioners and SEC Chair Gensler's cautious stance on crypto. Despite the anticipation of a spot BTC ETF driving significant investment and a price surge in bitcoin, the firm believes political and regulatory concerns will prevent approval, which is seen as a legitimization of Bitcoin as an alternative store of value. Bitcoin's price has recently dropped, with some of the decline potentially linked to these expectations.
Matrixport's prediction of Bitcoin reaching $45,000 by the end of the year appears to be accurate, as the cryptocurrency teases the $44,000 mark and is expected to breach $45,000 by the end of the month. The rally in Bitcoin's price is attributed to a combination of factors, including reactions to inflation trends, banking crises, policy shifts, and regulatory developments. The focus on Bitcoin rather than other cryptocurrencies is explained by difficulties in swapping fiat for crypto and the bankruptcy of lending and borrowing platforms. The next question is how Bitcoin will respond to the potential approval of a Bitcoin ETF, with a prediction market contract giving a 77% chance of approval by January 15.
Crypto services provider Matrixport predicts that if a BlackRock spot bitcoin exchange-traded fund (ETF) is approved, Bitcoin could rise to as high as $56,000. The conservative estimate is $42,000, assuming 10%-20% of gold ETF investors diversify into a spot bitcoin ETF. Matrixport highlights the potential inflows of $12-24 billion into the Bitcoin ETF, which is relatively conservative compared to the peak market cap of $44 billion for GBTC. The 15,000-strong U.S. registered investor advisor (RIA) community, overseeing around $5 trillion, holds immense potential, and even a modest 1% allocation recommendation for Bitcoin could bring in around $50 billion in inflows. The SEC has delayed several ETF applications, allowing more time for consideration.
Despite a recent dip in price, bitcoin could see a 10-20% increase in the next 30 days, potentially reaching $33,000 to $36,000 by August, according to Markus Thielen, head of research for crypto service provider Matrixport. Thielen noted that bitcoin has followed a pattern this year of rising about $10,000 before falling $5,000. As the market approaches Friday’s expiry of bitcoin options contracts, dealers will buy the cryptocurrency in the spot and futures markets, which could lead to an exaggerated price rally or a potential decline. Meanwhile, the SEC has taken a strong anti-crypto stance, but the recent spot bitcoin ETF filings by BlackRock and other asset managers could put pressure on regulators to approve the vehicle.
Matrixport's Bitcoin Greed & Fear Index (GFI) has surged from under 10% to 93% in a week, indicating excess optimism and suggesting a breather ahead for the recent Bitcoin rally. However, the 21-day simple moving average of the index is still rising, indicating more upside potential after consolidation. Some analysts predict a rally to $35,000 and higher, with heavy resistance and reconsolidation expected before any move higher. Ether's GFI index is yet to reach 90%, meaning it could continue to rise while Bitcoin takes a breather.
Bitcoin could potentially rally 20% to around $35,000 - $36,000, according to a research report by crypto-services provider Matrixport. The report suggests that Bitcoin has been trading in a narrowing wedge that is about to be broken to the upside, projecting a move higher by an amount equal to when the wedge started to be formed. Despite declining trading volumes, the report notes that transactions on the Bitcoin network have reached new all-time highs, and crypto sentiment has improved with meme coins being actively traded.
Bitcoin has surged 73% this year, outperforming most other asset classes, and analysts predict it may just be the start of a bigger advance for the cryptocurrency. Standard Chartered predicts bitcoin could reach $100,000 by end-2024, while Matrixport predicts it will more than double its current price and reach around $65,623 by next April. The recent banking turmoil has also given bitcoin some safe-haven appeal, thanks to its decentralized nature. Despite concerns over regulatory pressure, investors are turning to crypto and bitcoin as a safeguard against volatile market conditions.
Crypto-services provider Matrixport has stated that the impact of Mt. Gox repayments on the Bitcoin market will be limited. The defunct cryptocurrency exchange was hacked in 2014, resulting in the theft of 850,000 Bitcoins, valued at $500 million at the time and now worth $17.8 billion. Only 200,000 Bitcoins have been recovered, and creditors will receive a base payment with four options to receive the remainder of their funds. The deadline for repayments is September 30, with $1.7 billion in cash, 141,000 Bitcoin, and another 142,000 Bitcoin Cash to be distributed as part of a civil rehabilitation plan.
