The SEC's Expected Rejection of All Applications for Bitcoin ETFs Could Be the Cause of The Cryptocurrency's Collapse

Matrixport analyst Markus Thielen said that the Securities and Exchange Commission (SEC) will reject all applications for bitcoin spot ETFs in January 2024. This decision could have a negative impact on the cryptocurrency market, as ETFs could have attracted new investors and increased market liquidity.

Thielen noted that despite frequent meetings and updated S-1 prospectuses between applicants and the SEC, these filings still fail to meet key requirements that need to be met before SEC approval. The analyst also pointed out that SEC Chairman Gary Gensler is in favor of stricter requirements for cryptocurrency exchanges and companies.

"SEC Chairman Gensler is not in favor of cryptocurrency in the U.S., and it's probably hard to expect him to vote to approve spot bitcoin ETFs," Thielen noted. - This will probably happen by the second quarter of 2024, but we predict the SEC will reject all proposals in January."

Gensler has previously stated that there is too much fraud and malicious behavior in the cryptocurrency field. He also noted that the SEC has seen numerous violations of not only securities laws, but also other laws related to anti-money laundering and protecting the public from malicious actors.

The SEC's expected rejection of all applications for bitcoin ETFs could be the cause of the cryptocurrency's collapse. This is because ETFs could attract new investors and increase market liquidity. In the absence of ETFs, investors will be more cautious about investing in cryptocurrencies, which could lead to lower demand and falling prices.

Market Impact

The SEC's expected rejection of all bitcoin ETF applications could have the following impact on the cryptocurrency market:

Lower demand and lower prices: ETFs could attract new investors and increase market liquidity. In the absence of ETFs, investors would be more cautious about investing in cryptocurrencies, which could lead to lower demand and falling prices.
Increased volatility: The absence of ETFs may lead to increased volatility in the cryptocurrency market. This is because investors will be more inclined to speculate rather than make long-term investments.
Decreased confidence in cryptocurrency: The SEC's rejection of all ETF applications could decrease confidence in cryptocurrency in general. This could make it difficult to attract new investors and slow the industry's growth.

The SEC's final decision on bitcoin ETF applications will be made in early January 2024. However, given the position of SEC Chairman Gary Gensler, the likelihood of these applications being rejected is quite high. This could lead to negative consequences for the cryptocurrency market.