On its 15th anniversary, Bitcoin experienced a significant 8% crash, contributing to a nearly 9% downturn in the cryptocurrency market. This drop coincided with speculations about the potential rejection of spot Bitcoin Exchange-Traded Funds (ETFs) by the United States Securities and Exchange Commission (SEC). Despite the timing, expert analysts have dismissed the crash as unrelated to fears of ETF rejection.
Approximately half a billion dollars in crypto-long positions were liquidated during this market turmoil. However, leading crypto analysts, including Scott Melker and Joe Carlasare, challenged the narrative that this was a panic-induced sell-off triggered by a report from Matrixport. Instead, they suggested it was a typical market correction and an opportunity for a long squeeze, emphasizing that markets do not move in straight lines.
Matrixport’s report, released on the occasion of Bitcoin’s anniversary, speculated that the SEC would reject the spot ETF. It suggested that such a rejection could undermine Bitcoin’s legitimacy as an alternative store of value. However, the report was criticized for lacking substantial evidence to support its claims.
The SEC’s official decision window on the ETF matter is from January 5 to January 10, creating a sense of anticipation within the cryptocurrency community. Despite the uncertainty, Matrixport’s analysis forecasts only a modest decline in Bitcoin prices in case of an ETF rejection. The report estimates a potential drop of about 20%, possibly bringing Bitcoin’s value to the $36,000 to $38,000 range.
As the market navigates through these fluctuations and speculative reports, it becomes crucial to distinguish between factual developments and mere conjecture. The coming days are expected to provide clarity as the SEC announces its decision on the spot Bitcoin ETFs.
