{"id":34715,"date":"2024-01-03T14:52:35","date_gmt":"2024-01-03T18:52:35","guid":{"rendered":"https:\/\/cryptocornercafe.com\/cafe\/?p=34715"},"modified":"2024-01-03T14:52:35","modified_gmt":"2024-01-03T18:52:35","slug":"bitcoin-crashes-to-41500-as-etf-approval-hangs-in-balance-experts","status":"publish","type":"post","link":"http:\/\/cryptocornercafe.com\/cafe\/2024\/01\/03\/bitcoin-crashes-to-41500-as-etf-approval-hangs-in-balance-experts\/","title":{"rendered":"Bitcoin Crashes To $41,500 As ETF Approval Hangs In Balance: Experts"},"content":{"rendered":"

As the January 10 deadline<\/a> for the US Securities and Exchange Commission (SEC) to decide on a series of spot Bitcoin Exchange-Traded Funds (ETFs) approaches, the market is rife with speculation.<\/p>\n

Initially, there was a strong consensus for approval, but recent expert analyses suggest a possible change in course. Meanwhile, the Bitcoin price has crashed by 6.5% in 20 minutes, dropping from $44,400 to $41,500.<\/p>\n

1. Bloomberg\u2019s Insight: A Matter of Timing, Not Denial<\/h2>\n

Bloomberg\u2019s ETF expert, Eric Balchunas, assessed a mere 10% chance of the ETFs not being approved, primarily due to the SEC requiring additional time to review the proposals. This perspective is critical because it implies that the SEC is not outright opposed to the idea of a spot Bitcoin ETF<\/a>, but is cautious in its approach.<\/p>\n

Related Reading: Bitcoin ETF: SEC May Notify Approved Issuers To Launch Very Soon \u2013 Here\u2019s When<\/a><\/p>\n

Balchunas commented<\/a>, \u201cI would say if we don\u2019t see it in the next two weeks, it\u2019s more because they need more time,\u201d indicating that a delay in approval should not be interpreted as a final rejection.<\/p>\n

His colleague, James Seyffart, provided<\/a> further insights, noting, \u201cStill looking for potential approval orders in that Jan 8 to Jan 10 window. [\u2026] We\u2019re focused on these 11 spot Bitcoin ETF filers [\u2026] Expecting most of these N\/A\u2019s to be filled over the next ~week,\u201d highlighting the dynamic nature of the situation.<\/p>\n

2. Matrixport\u2019s Pessimistic Outlook: A Delay To Q2 2024<\/h2>\n

Matrixport offers a more cautious outlook<\/a>, anticipating that the SEC\u2019s approval of Bitcoin ETFs might be deferred until the second quarter of 2024. This analysis hinges on a combination of regulatory challenges and the prevailing political climate under SEC Chair Gary Gensler<\/a>\u2018s leadership.<\/p>\n

The report states, \u201cThe leadership of the SEC\u2019s five-person voting Commissioners, predominantly Democrats<\/a>, influences the decision-making process. With Chair Gensler\u2019s cautious stance on crypto in the US, it seems unlikely that he would endorse the approval of Bitcoin Spot ETFs in the near term.\u201d<\/p>\n

The firm further explains that despite the ongoing interactions between ETF applicants and the SEC, resulting in multiple reapplications, there remains a fundamental requirement unmet that is crucial for the SEC\u2019s approval. This requirement, although unspecified in the report, is suggested to be a significant compliance or regulatory hurdle that could be addressed by the second quarter of 2024.<\/p>\n

The potential delay or rejection of the ETFs, according to Matrixport, could have a notable impact on Bitcoin\u2019s market value. They predict a possible 20% correction, with prices potentially falling to the $36,000 range.<\/p>\n

Furthermore, Matrixport suggests that such an outcome could lead to a swift unwinding of market positions, particularly the $5.1 billion in additional perpetual long Bitcoin futures.<\/p>\n

The report advises traders to consider hedging their positions if no approval news emerges by January 5, 2024, suggesting the purchase of $40,000 strike puts for the end of January or even shorting Bitcoin through options.<\/p>\n

3. Greeks Live\u2019s Analysis: Decreasing Confidence<\/h2>\n

Greeks Live, focusing on crypto options trades, has observed<\/a> a shift in market sentiment, with a decreased likelihood of the ETF\u2019s passage. They report a significant decline in the ATM option IV for the week and below 65% for the January 12 expiration, indicating reduced market expectations for the ETF approval.<\/p>\n

The report notes, \u201cCurrent month puts are now cheaper, and block trades are starting to see active put buying, with options market data suggesting that institutional investors are not very bullish on the ETF market.\u201d<\/p>\n

A possible delay or rejection of Bitcoin ETFs carries significant market implications. The anticipation of ETF approval has been a major driving force in recent market dynamics, leading to increased investments<\/a>. A decision against the ETFs could result in a rapid unwinding of these positions, potentially causing a sharp decrease in Bitcoin prices.<\/p>\n

At press time, BTC had already recovered some of its losses and was trading at $42,450. This means that the price has once again returned to the upward trend channel in the 1-day chart that was established in mid-October last year.<\/p>","protected":false},"excerpt":{"rendered":"

<\/p>\n

As the January 10 deadline<\/a> for the US Securities and Exchange Commission (SEC) to decide on a series of spot Bitcoin Exchange-Traded Funds (ETFs) approaches, the market is rife with speculation.<\/p>\n

Initially, there was a strong consensus for approval, but recent expert analyses suggest a possible change in course. Meanwhile, the Bitcoin price has crashed by 6.5% in 20 minutes, dropping from $44,400 to $41,500.<\/p>\n

1. Bloomberg\u2019s Insight: A Matter of Timing, Not Denial<\/h2>\n

Bloomberg\u2019s ETF expert, Eric Balchunas, assessed a mere 10% chance of the ETFs not being approved, primarily due to the SEC requiring additional time to review the proposals. This perspective is critical because it implies that the SEC is not outright opposed to the idea of a spot Bitcoin ETF<\/a>, but is cautious in its approach.<\/p>\n

Related Reading: Bitcoin ETF: SEC May Notify Approved Issuers To Launch Very Soon \u2013 Here\u2019s When<\/a><\/p>\n

Balchunas commented<\/a>, \u201cI would say if we don\u2019t see it in the next two weeks, it\u2019s more because they need more time,\u201d indicating that a delay in approval should not be interpreted as a final rejection.<\/p>\n

His colleague, James Seyffart, provided<\/a> further insights, noting, \u201cStill looking for potential approval orders in that Jan 8 to Jan 10 window. [\u2026] We\u2019re focused on these 11 spot Bitcoin ETF filers [\u2026] Expecting most of these N\/A\u2019s to be filled over the next ~week,\u201d highlighting the dynamic nature of the situation.<\/p>\n

2. Matrixport\u2019s Pessimistic Outlook: A Delay To Q2 2024<\/h2>\n

Matrixport offers a more cautious outlook<\/a>, anticipating that the SEC\u2019s approval of Bitcoin ETFs might be deferred until the second quarter of 2024. This analysis hinges on a combination of regulatory challenges and the prevailing political climate under SEC Chair Gary Gensler<\/a>\u2018s leadership.<\/p>\n

The report states, \u201cThe leadership of the SEC\u2019s five-person voting Commissioners, predominantly Democrats<\/a>, influences the decision-making process. With Chair Gensler\u2019s cautious stance on crypto in the US, it seems unlikely that he would endorse the approval of Bitcoin Spot ETFs in the near term.\u201d<\/p>\n

The firm further explains that despite the ongoing interactions between ETF applicants and the SEC, resulting in multiple reapplications, there remains a fundamental requirement unmet that is crucial for the SEC\u2019s approval. This requirement, although unspecified in the report, is suggested to be a significant compliance or regulatory hurdle that could be addressed by the second quarter of 2024.<\/p>\n

The potential delay or rejection of the ETFs, according to Matrixport, could have a notable impact on Bitcoin\u2019s market value. They predict a possible 20% correction, with prices potentially falling to the $36,000 range.<\/p>\n

Furthermore, Matrixport suggests that such an outcome could lead to a swift unwinding of market positions, particularly the $5.1 billion in additional perpetual long Bitcoin futures.<\/p>\n

The report advises traders to consider hedging their positions if no approval news emerges by January 5, 2024, suggesting the purchase of $40,000 strike puts for the end of January or even shorting Bitcoin through options.<\/p>\n

3. Greeks Live\u2019s Analysis: Decreasing Confidence<\/h2>\n

Greeks Live, focusing on crypto options trades, has observed<\/a> a shift in market sentiment, with a decreased likelihood of the ETF\u2019s passage. They report a significant decline in the ATM option IV for the week and below 65% for the January 12 expiration, indicating reduced market expectations for the ETF approval.<\/p>\n

The report notes, \u201cCurrent month puts are now cheaper, and block trades are starting to see active put buying, with options market data suggesting that institutional investors are not very bullish on the ETF market.\u201d<\/p>\n

A possible delay or rejection of Bitcoin ETFs carries significant market implications. The anticipation of ETF approval has been a major driving force in recent market dynamics, leading to increased investments<\/a>. A decision against the ETFs could result in a rapid unwinding of these positions, potentially causing a sharp decrease in Bitcoin prices.<\/p>\n

At press time, BTC had already recovered some of its losses and was trading at $42,450. This means that the price has once again returned to the upward trend channel in the 1-day chart that was established in mid-October last year.<\/p>\n

<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"colormag_page_layout":"default_layout","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[82],"tags":[],"class_list":["post-34715","post","type-post","status-publish","format-standard","hentry","category-blockchain"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/34715","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/comments?post=34715"}],"version-history":[{"count":1,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/34715\/revisions"}],"predecessor-version":[{"id":34723,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/34715\/revisions\/34723"}],"wp:attachment":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/media?parent=34715"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/categories?post=34715"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/tags?post=34715"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}