Amid heightened anticipation and skepticism surrounding the potential approval of the first spot Bitcoin ETF in the United States, prominent Bitcoin critic and gold advocate Peter Schiff has issued a cautionary note to Bitcoin enthusiasts. Via a post on X (formerly Twitter), Schiff warned that the introduction of a spot Bitcoin ETF could disastrously impact BTC prices. He argued that the longstanding hope for a U.S.-listed spot Bitcoin ETF has been a significant factor underpinning Bitcoin's price and speculative appeal. Schiff suggested that if the anticipated institutional demand fails to materialize post-approval, it could lead to a sharp decline in BTC prices. Despite his long-standing skepticism and frequent predictions of Bitcoin's downfall – which have been consistently disproven – Schiff's remarks were met with a barrage of responses from Bitcoin supporters who countered by comparing the potential impact of a Bitcoin ETF to that of a gold ETF on their respective markets.
Matrixport, a data-centric advisory firm, has put forth a prediction that might dampen the spirits of those awaiting the first U.S. spot Bitcoin ETF. Contrary to the optimism of many, the firm anticipates that the SEC could reject all applications for spot BTC ETFs by the final deadline of January 10. This forecast starkly contrasts with the views of numerous ETF analysts, some of whom estimate as high as a 90% chance of approval by the deadline.
Despite the optimistic projections and the frequency of meetings between ETF applicants and SEC officials, Matrixport maintains that none of the applications have met the essential criteria required for SEC approval. The firm predicts the launch of the first spot Bitcoin ETF to be in 2024, but not before the second quarter. Matrixport's analysis emphasizes the current composition of the SEC, dominated by Democrats, including Chairman Gary Gensler, which they believe makes it unlikely for any commissioner to vote in favor of a Spot Bitcoin ETF.
As the January 10 decision deadline by the SEC draws near, the initial market optimism is gradually giving way to skepticism. This shift in sentiment is reflected in the recent weakening of crypto mining stocks and a sell-off in various cryptocurrency-related U.S. stocks. Despite earlier reports, citing unnamed sources, that predicted approval of the first spot Bitcoin ETF by January 2, such an event did not materialize.
Bloomberg ETF analyst Eric Balchunas, who has been closely following the spot Bitcoin ETF debate, had earlier seen a 99% chance of approval in the first quarter of 2024. However, he now believes it's highly improbable that the SEC will change its long-standing stance against these products. This ongoing reluctance by the SEC, often referred to as the "Ten Years of Pull," suggests yet another likely rejection of the application, continuing a trend of cautious regulatory approach towards cryptocurrency-based financial products.
