The Investing Game Has Changed! 
In a strong turnaround from yesterday’s flash crash, the Bitcoin (BTC) price has staged a recovery, breaching the $43,000 mark. This surge comes after yesterday’s intense volatility, where the cryptocurrency giant witnessed an over 11% flash crash following a controversial report from Matrixport.
The report suggested a potential rejection by the US Securities and Exchange Commission (SEC) of the much-anticipated spot Exchange Traded Funds (ETFs), triggering the second-largest liquidation of long positions in the past year. Bitcoin’s price plummeted to as low as $41,500.
However, Bitcoin is today stabilizing above $43,000, influenced by a combination of factors. Notably, several experts have disputed the Matrixport report’s validity. Adding to the positive sentiment, a significant SEC related update has caught the market’s attention.
Bitcoin ETF Tomorrow?
According to a report by Fox Business, SEC staff attorneys from the Division of Trading and Markets were engaging in crucial discussions with representatives from major exchanges such as the New York Stock Exchange, Nasdaq, and the Chicago Board Options Exchange on Wednesday. This engagement is significant as it pertains to the approval of several Bitcoin ETF applications.
The meetings are seen as a positive sign that the SEC is nearing approval of some or all of the dozen applications by major money managers and crypto firms for the product. An anonymous source familiar with these developments stated, “While the final decision has not been made, sources close to the proceedings say the SEC could begin notifying issuers of approval on Friday with trading beginning as early as next week.”
Bloomberg ETF analyst James Seyffart commented on Eleanor Terrett’s report from Fox Business via X, stating: “My view is in line with Eleanor Terrett’s reporting. I think the SEC could begin signaling to issuers to expect approvals tho I’m still expecting official approvals Jan 8 – 10. I also think the gap between approval orders and actual trading will be measured in days — not weeks.”
Echoing Seyffart’s views, Eric Balchunas, his colleague at Bloomberg, commented, “Things you prob don’t do if you going to deny or delay. Hearing similar btw, and why why when we see updated (final) 19b-4s roll in that is sign approval imminent as SEC has been doing back and forth w issuers offline to perfect their 19b-4s vs doing numerous refilings a la S-1s.”
Scott Johnsson, a finance lawyer at Davis Polk, weighed in on Balchunas’ statement: “In every past ETF wave, the SEC did not do this. Why? Because (1) this takes up a ton of SEC resources and (2) makes it MUCH harder to successfully survive judicial scrutiny (and after Grayscale, this is like drawing blood from a stone). If you intend to deny, you just deny.”
BTC Price Remains Ultra Bullish
In light of these developments, the cryptocurrency market remains cautiously optimistic, with indicators strongly pointing towards an ETF approval by January 10, potentially even as early as January 5. Notably, the Bitcoin price has closed its daily candle within the uptrend channel, established in mid-October. At press time, BTC traded at $43,102.
Featured image from Shutterstock chart from TradingView.com
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