Approval of U.S. Bitcoin ETF Looms Amid Skepticism and Shaky Market Stability
Summary:
Prominent Bitcoin critic, Peter Schiff, warns that approval of U.S. spot Bitcoin ETFs may lead to a sharp drop in Bitcoin prices if institutional demand doesn't meet expectations. U.S. data-focused firm, Matrixpoint, predicts that the Securities and Exchange Commission (SEC) may reject all pending spot BTC ETF applications before the January 10th deadline, potentially pushing the approval of the first spot Bitcoin ETF to Q2 2024. Market optimism shifts to skepticism as reflected in the current downward trend in crypto mining stocks and sell-offs of crypto-related U.S. stocks.
In the prevailing atmosphere of hope and doubt concerning the potential authorization of the inaugural Bitcoin exchange-traded fund (ETF) in the U.S., famed Bitcoin skeptic and gold advocate, Peter Schiff, has issued a cautionary statement to Bitcoin enthusiasts. In a post on X (the platform formerly known as Twitter), Schiff alerted that the introduction of spot Bitcoin ETFs could lead to a disastrous plunge in BTC prices. Schiff reasoned that the continued speculation and hopeful outlook for a U.S.-approved spot Bitcoin ETF have propped up Bitcoin prices for years. He warned of a potential crash in BTC prices if the expected institutional demand falls short after the approval of an ETF.
Schiff, a known critic of Bitcoin, has forecasted its downfall repeatedly, only to be rebutted with every cycle. Schiff's post elicited a multitude of replies from Bitcoin supporters, pointing out that just like a gold ETF did not curtail demand for physical gold, a spot Bitcoin ETF would only serve to stimulate the BTC market.
However, per the data-focused advisory firm Matrixpoint, those hoping for the first spot Bitcoin ETF in the U.S. might have to hold on a bit longer. The firm predicts that the U.S. Securities and Exchange Commission (SEC) will likely discard all pending spot BTC ETF applications before the final cut-off date of January 10th.
This recent conjecture from Matrixpoint offers a completely different outlook compared to numerous ETF analysts' forecasts, several of whom predicted a 90% probability of approval prior to the January 10th deadline. Despite the consistent dialogues between the ETF applicants and SEC officials, Matrixpoint maintains that "all applications lack a vital requirement essential for SEC approval." The firm anticipates the sanction of the first spot Bitcoin ETF to occur in the second quarter of 2024.
Matrixpoint, in their analysis, pointed out that since Democrats currently hold the majority in the five-member voting committee of the SEC, it is unlikely that any of the commissioners, including SEC chief Gary Gensler, would endorse a spot Bitcoin ETF.
While several reports drawing from nameless sources had anticipated the approval of the first spot Bitcoin ETF by January 2nd, it didn't pan out. As the SEC's definitive decision date of January 10th draws near, market optimism appears to be morphing into doubt. This change in market sentiment is reflected in the downward trend observed in crypto mining stocks and the sell-offs noticeable in various crypto-affiliated U.S. stocks.
ETF analyst for Bloomberg, Eric Balchunas, who has consistently placed himself at the vanguard of the spot Bitcoin ETF contention, had earlier predicted a 99% approval probability in the first quarter of 2024. He now purports that there's a slim chance that the SEC might spring a surprise and reject the impending applications once again.
Published At
1/3/2024 3:19:19 PM
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