NEW YORK, January 3, 2024 - Matrixport, a crypto investment services provider, anticipates that the U.S. Securities and Exchange Commission (SEC) will reject all applications for listing a spot bitcoin exchange-traded fund (ETF) this month. In a Wednesday note, the firm highlighted that the SEC's current five-person voting leadership, dominated by Democrats, is critical to ETF approvals.

SEC Chair Gary Gensler, who has expressed reservations about crypto in the U.S., is unlikely to support the approval of bitcoin spot ETFs, according to Matrixport. The firm argues that approving such an ETF would legitimize Bitcoin as an alternative store of value, which could be politically disadvantageous. Despite the expectation of ETF approval driving Bitcoin's price to levels not seen since April 2022, Matrixport estimates that $10 billion of the $14 billion of fiat and leverage deployed into crypto since September might be tied to ETF anticipation.

Bitcoin saw a sharp decline of nearly 7% to $42,445, with the drop occurring within minutes around 12:00 UTC. Meanwhile, Galaxy Digital’s Head of Research, Alex Thorn, criticized the Matrixport report, calling it "bewildering" and "nonsensical," as Galaxy, in partnership with Invesco, is among the firms with pending ETF applications before the SEC.