The cryptocurrency market saw a sharp sell-off this week fueled by a report from Matrix Port predicting the SEC would reject all spot Bitcoin ETF applications in January. The report came just a day after the same analyst had predicted imminent approval for the ETFs. Many in the crypto community criticized the conflicting reports, questioning the credibility of Matrix Port.
Matrix Port was cofounded by Jihan Wu, a leading supporter of Bitcoin Cash. Some believe the negative prediction about Bitcoin ETFs was politically motivated. Others argued the conflicting reports seemed intentionally manipulative, given the significant market reaction. Major players in the crypto industry like Anthony Pompliano pushed back, arguing the macro backdrop remains highly supportive of crypto regardless of short term regulatory noise.
Legally, attorneys argued a blanket rejection of all spot Bitcoin ETFs would likely trigger lawsuits from the applicants and face losses in court, given the SEC's recent defeat against Grayscale. Several big players in finance also continue voicing confidence, like BlackRock planning to help seed capital for an approved Bitcoin ETF. With many exchanges and issuers actively lobbying the SEC, legal experts predict eventual approval.
The conflicting reports highlight the uncertainty still surrounding Bitcoin ETF approval. However, many maintain long term approval is inevitable given expanding institutional interest in crypto. The volatility shows why thesis-based investing guided by macro backdrop can prove more reliable than reacting to unpredictable regulatory speculation in the short term.
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