- Report from Matrixport predicts SEC will reject all Bitcoin ETF applications in January, sparking a flash crash in Bitcoin’s price.
- Bitcoin price plunged as low as $41,804 during the crash, down 7% on the day, resulting in over $550 million worth of long positions being liquidated.
- The bearish prediction goes against consensus views that SEC approval of a Bitcoin ETF is likely this year after Grayscale’s court win, but shows the impact predictions can have on crypto prices when leverage is high.
Bitcoin‘s price fell sharply on Wednesday morning after a report predicted the SEC would reject all pending Bitcoin ETF applications in January. The bearish forecast panicked traders, resulting in over $500 million worth of liquidations.
Report Predicts SEC Rejections of Bitcoin ETFs
The flash crash was sparked by a report from Matrixport titled “Why the SEC will REJECT Bitcoin Spot ETFs again.” The report suggested none of the Bitcoin ETF applications will be approved by the SEC in January, despite previous meetings between applicants and SEC staff. Matrixport believes approval is more likely in Q2 2024.
Mass Liquidations Follow Price Plunge
Bitcoin plunged as low as $41,804 during the crash, down 7% on the day. According to Coinglass, over $550 million worth of long positions were liquidated in the past 24 hours. The report came out around 5am ET, when leverage was high and longs were aggressive.
The bearish prediction goes against consensus views that SEC approval of a Bitcoin ETF is likely this year after Grayscale’s court win. But the short-term market impact demonstrates the power predictions have to move crypto prices, especially when leverage is high.