Amid the mix of anticipation and skepticism about the potential approval of the first spot Bitcoin (BTC) exchange-traded fund (ETF) in the United States, prominent Bitcoin critic and gold proponent Peter Schiff has warned BTC enthusiasts to be careful what they wish for.
In a tweet on X (formerly Twitter), Schiff said spot Bitcoin ETFs could have a catastrophic impact on the price of BTC. Schiff said that the promise of a U.S.-listed spot Bitcoin ETF has supported the Bitcoin price and speculative demand for years. This could mean the approval of an ETF could collapse the price of BTC if the anticipated institutional demand doesn’t come.
Be careful what you wish for. The promise of a U.S. listed spot #BitcoinETF has been supporting the #Bitcoin price and speculative demand for years. Once the ETFs are launched and the highly anticipated institutional and other new investor demand does not show up, look out below!
— Peter Schiff (@PeterSchiff) January 2, 2024
Schiff has long been a Bitcoin skeptic and has predicted its demise for years, only to be proven wrong each cycle. He received a barrage of responses to his tweet from BTC proponents, who reminded him that just as gold ETFs didn’t hamper real gold’s demand, a spot Bitcoin ETF would only add impetus to the BTC market.
However, Bitcoin proponents may have to wait a little longer for the first spot Bitcoin ETF in the U.S., according to data-centric consultancy firm Matrixport. The firm predicted that the Securities and Exchange Commission is likely to reject all spot BTC ETF applications before the final deadline of Jan. 10.
The latest prediction from Matrixport paints a stark contrast to what many ETF analysts have predicted, with several seeing a 90% chance of approval before the Jan. 10 deadline. However, Matrixport said that despite the frequent meetings between the ETF applicants and staff from the SEC, “all applications fall short of a critical requirement that must be met before the SEC approves.” Matrixport said it doesn’t see the first spot Bitcoin ETF being approved before Q2 2024.
In its analysis, the data-centric firm noted that Democrats dominate the current five-person voting commissioner leadership of the SEC, and it is less likely that any of the commissioners, including SEC Chair Gary Gensler, would vote in favor of a spot Bitcoin ETF.
Related: Grayscale’s latest spot Bitcoin ETF amendment omits authorized participants
Several reports citing unnamed sources predicted the first spot Bitcoin ETF would be approved by Jan. 2; however, this didn’t happen. As the SEC’s Jan. 10 deadline for a decision nears, market optimism is morphing into skepticism, as evidenced by the weakness in crypto mining stocks and the sell-off in several crypto-related U.S. stocks.
The likelihood of the ETF's passage became less and less likely, and the market saw a stalemate. Weakness in crypto mining stocks, and the sell-off in several crypto-related U.S. stocks, also reinforced the market's skepticism.
— Greeks.live (@GreeksLive) January 3, 2024
ATM option IV plummeted to 52% for the week and… pic.twitter.com/orjr1Wcwwf
Bloomberg ETF analyst Eric Balchunas, who has been at the forefront of the spot Bitcoin ETF debate and sees a 99% chance of approval in the first quarter of 2024, now believes there is still a slim chance that the SEC could hand down the “rug pull of a decade” and reject the applications once again.
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