Matrixport: If the US SEC rejects the Bitcoin spot ETF, Bitcoin will quickly drop by 20%

ChainCatcher message, according to a report released by Matrixport, it believes that all current spot Bitcoin ETF applications have failed to meet a key requirement, and therefore expects the SEC to reject all proposals in January, which may materialize in the second quarter of 2024.

Since traders began betting on ETF approval in September 2023, at least $14 billion of additional fiat and leverage has been deployed into the cryptocurrency space. Some of this capital flow may be related to the easing macro environment, as the Federal Reserve has turned dovish. However, of the $14 billion in additional long positions, $10 billion may be related to expectations of ETF approval.

If the SEC rejects the ETF approval, there will be a massive liquidation in the market, with most of the $5.1 billion long positions expected to be closed, and the Bitcoin price may quickly drop by 20%, falling back to the range of $36,000/$38,000. Nevertheless, Matrix on Target still expects that even if the SEC vetoes the ETF, the Bitcoin price will remain above the $42,000 level at the end of 2024.