Bitcoin Spot ETF Approval Triggers Market Fluctuation, Industry Insiders Refute Bearish Views

Recently, a cryptocurrency investment firm released a report titled "Why the SEC Will Reject BTC Spot ETF Again," which has sparked widespread attention and discussion in the market. The report predicts that the U.S. Securities and Exchange Commission will reject all Bitcoin Spot ETF applications in January, and approval may not come until the second quarter of 2024. The report also predicts that the Bitcoin price will fall to the range of $36,000 to $38,000 and suggests that investors consider shorting Bitcoin.

The release of this report has caused quite a stir in the cryptocurrency market. As a result, the price of Bitcoin quickly dropped from a high of $45,000 to around $40,000, plummeting $5,000 in a short time. According to data platforms, within 4 hours of the report's release, the total liquidation amount across the network reached $531 million, with long positions liquidating for $496 million and short positions liquidating for $35.3799 million. Major cryptocurrencies such as Bitcoin, Ethereum, and Solana all experienced significant liquidations.

However, some industry experts have questioned the views presented in the report. Eric Balchunas, a Bloomberg analyst who has been closely following the approval progress of Bitcoin spot ETFs, stated on social media that he personally has not seen any signs that the ETF would be rejected and questioned the reliability of the sources in the report. Balchunas believes that if the SEC intends to continue delaying or rejecting the Bitcoin spot ETF resolution, it would not hold meetings with institutions like Nasdaq, the Chicago Options Exchange, and the New York Stock Exchange to discuss the 19b-4s documents submitted by the ETF issuers. He also pointed out that the SEC has been in close communication with the issuers to refine the relevant documents.

It is worth noting that Balchunas previously stated that he believes the likelihood of a Bitcoin Spot ETF being approved before January 10 is as high as 90%. This contrasts sharply with the predictions of the report.

Some have compared the practice of publishing bearish reports to the research firm Muddy Waters, which focused on shorting Chinese stocks listed in the U.S. Muddy Waters has shorted several Chinese companies listed in the U.S., including Luckin Coffee, New Oriental, and TAL Education. Muddy Waters' shorting strategy typically involves making a "judgment" about the target company at the beginning of the report, supported by a large amount of data and evidence from on-site investigations.

However, shorting the market is not a lawless territory. In February 2022, the U.S. Department of Justice launched an investigation into short-selling firms to determine whether they were depressing stock prices by sharing short reports in advance or engaging in illegal trading strategies. The cryptocurrency market is similarly facing regulatory scrutiny, with several high-profile legal cases emerging recently.

In response to the controversy, senior officials from the reporting organization have made a statement. They indicated that the company's analysts operate independently, expressing their views without any influence or interference from management. They also stated that the report was originally prepared for the company's VIP clients, and its widespread dissemination in the media was neither planned nor controllable by the company.

However, this explanation has also raised some doubts. Some argue that as a professional cryptocurrency financial management and research institution, it seems unreasonable to allow analysts to independently publish reports that may affect the market. At the same time, whether providing short-selling recommendations to VIP clients is in the best interest of the clients is also worth discussing. In addition, the rapid dissemination of the report on media and social platforms has also sparked some speculation.

Overall, this event reflects the sensitivity of information in the cryptocurrency market and the diverse perspectives of market participants. At this critical moment of Bitcoin Spot ETF approval, the market's reaction to various information and analysis reports is particularly intense. Investors need to maintain a rational and cautious attitude when facing various market predictions and analyses, comprehensively considering multiple sources of information to make their own judgments.