Did Matrixport Really Throw Bitcoin Birthday Bash for the Books?
Van Thanh Le•
Jan 4 2024
Bitcoin's January Jitters: ETF Freeze or Frigid Fluff?
Will Bitcoin face a freeze in frigid January? Markus Thielen from Matrixport says so. On January 3, the cryptocurrency expert predicted that the Securities and Exchange Commission (SEC) could reject all proposals for bitcoin spot Exchange-Traded Funds (ETFs) this month, due to an inherent industry gap in regulatory compliance. SEC Chair, Gary Gensler, a stickler for compliance, has earned the reputation of being a crypto-agnostic.
What will the market fallout be then? Matrixport predicts a 20% plummet in prices, initiating a domino effect of successive liquidations that could drive the market values down to a range of $36,000 to $38,000. The company's advisory to investors: Buy $40,000 strike puts or consider short positions to shield themselves.
Just before this insight, Bitcoin was trading buoyantly at $44,562 and celebrating its 15th birthday with a 65% surge over the last three months. However, the revelries were short-lived as, post-announcement, Bitcoin tumbled to as low as $40,700 without a solid rationale.
This duality threw Bloomberg analysts, Eric Balchunas, and James Seyffart into a tizzy, sparking doubts about the rejection claims. Balchunas hinted that the majority (3 out of 5) of SEC commissioners were leaning towards Bitcoin spot ETF approval.
Crypto enthusiast, Hester Peirce, is one such commissioner, and two Republican commissioners are also expected to approve. Even Gensler, who was handpicked by President Biden, has signaled his possible acquiescence to legal rulings supportive of ETFs.
The SEC, however, has been seen to synchronize its operations with the Democratic party's ideology, with the latter perceived to have a profound crypto antipathy. As a result, the political landscape could play a profound role in the SEC's upcoming decision.
The hubbub surrounding Thielen's claim of rejection would have had no legs to stand on, had Coindesk not published the speculative opinion piece under a rather definitive title: "Bitcoin Spot ETF Proposals to Be Rejected by SEC: Matrixport," as stated in this Trustnodes article.
Meanwhile, the SEC has been setting the stage for its decision, conducting closed-door meetings with eminent stock exchanges like the New York Stock Exchange, Nasdaq, and Cboe, according to Eleanor Terrett of FOX Business. The goal is to gain input and insights on the imminent approval of Spot Bitcoin ETFs.
Interestingly, financial behemoth Goldman Sachs expressed an interest to step in as an authorized participant for BlackRock & Grayscale's proposed Spot Bitcoin ETF. The former NYSE President also added fuel to the fire by opining that money would gush into Bitcoin if a Spot ETF gets the green light.
Matrixport was also accused of setting the cat among the pigeons by releasing two analyses simultaneously - one forecasting Bitcoin's spotlight ETF approval and a climb to a dizzying $50,000, while the rival report foretold of rejection, though Jihan Wu, the founder of Matrixport, rejected the claim.
Recently, Jihan Wu clarified that the wide dissemination of the report was beyond their control and insisted on their analysts' independence. With all the turmoil and uncertainties, he maintains a long-term view that SEC approval of a Bitcoin spot ETF is not just probable, but inevitable, opening the floodgates for fresh investments in Bitcoin.
Bitcoin's Birthday Battered: Crypto Rollercoaster Rocks 15th Anniversary
The 15th anniversary of Bitcoin's creation was marred by the cryptocurrency giant tumbling from a high of $45,600 to a low of $40,700, creating waves of disquiet in the market.
This seismic event in the cryptocurrency world saw the market cap slide dramatically, shedding an alarming $100 billion within a span of three intense hours. Indeed, the crypto rollercoaster was in full throttle, with an estimated $500 million in cryptos being liquidated in concentration, all within a frantic hour.
Matrixport, a known indicator, was quick with predictions. The crypto community voiced their fears, questioning whether Matrixport's sway was causing the unsettling shakes in the market landscape.
Amidst the maelstrom, Bitcoin wasn't the lone ship braving the stormy seas, Ethereum too weathered a 6% drop during the flash crash. Market experts, such as Scott Melker and Joe Carlasare, attributed this downturn to an over-saturation of leverage. Their views cast the crash as a market correction in response to the volatility, rather than a direct fallout from the impending SEC slapdown over the Bitcoin ETF.
The steep price fall coincided with long liquidations in the crypto space, amounting to a staggering $514 million. Additionally, the overall crypto market value plunged from a lofty $1.82 trillion to a less grand $1.71 trillion within a nail-biting 24-hour period.
As news of the Matrixport's about-turn on the SEC's stance towards Bitcoin ETFs spread, experienced market hawks wondered aloud over the credibility of their report. The market was rife with debates whether the reported Bitcoin ETF rejection was the trigger for the Bitcoin price crash.
The murmurs of criticism were not one-note, though. There were mixed reactions to Matrixport's predictions, with some critics calling out the firm for the disarray in the market, while others were quick to attribute it to the inherent unpredictability of market trends.
The role of influential entities such as Matrixport influencing market sentiment was dissected and made a talking point. The question loomed – is market sentiment being shaped by insider influence?
Raoul Pal, an ex-Goldman Sachs heavyweight, offered his version — mapping three potential paths for the crypto market's trajectory. He gave a 60% probability to a regular cycle identical to past patterns, a 20% chance to an accelerated cycle propelled by aggressive retail demand, and the remaining 20% odds to the possible emergence of a 'gigantic bubble cycle.'
Bitcoin's birthday bash turned into a market maelstrom, highlighting the cryptocurrency's inherent volatility and leaving investors guessing about its future trajectory. While regulatory hurdles and internal market forces remain key players, one thing is clear: the Bitcoin rollercoaster is far from reaching its final station. Buckle up, and prepare for a wild ride.
1. What happened to Bitcoin on its 15th birthday?
Bitcoin's birthday celebrations took a nosedive as prices plunged from $44,562 to $40,700 within hours, wiping $100 billion off the market cap. While the exact cause remains unclear, theories range from over-leveraged positions to regulatory anxieties sparked by a report predicting SEC rejection of Bitcoin ETFs.
2. Did Matrixport crash the market?
Some point fingers at Matrixport, a crypto analyst firm, whose report predicting ETF rejection coincided with the crash. However, others argue the drop was a market correction unrelated to the report. Matrixport itself added to the confusion by later predicting a Bitcoin surge, raising questions about their credibility and influence.
3. What's next for Bitcoin?
Experts offer diverse predictions, with Raoul Pal suggesting three potential paths: a regular cycle, an accelerated cycle fueled by retail demand, or even a "gigantic bubble cycle." One thing's certain: Bitcoin's rollercoaster ride is far from over, and investors should brace for continued volatility and unpredictability.
This article has been refined and enhanced by ChatGPT.