This Week on Crypto Twitter: ETF Fever Won’t Break

Illustration by Mitchell Preffer for Decrypt

ETF fever has taken over the physique of crypto—and now seems to have a grip on markets and discourse so all-consuming that it possible gained’t let up till the decision is in.

This week on Crypto Twitter, already heated hypothesis concerning the eagerly anticipated monetary product reached new highs, as rumors and predictions rattled each spirits and crypto costs.

The large shock to the system got here Wednesday, when an ominous report from digital asset supervisor Matrixport prophesied that the Securities and Alternate Fee (SEC) would reject all spot Bitcoin ETF purposes in January.

MatrixPort, a agency that I’ve by no means heard of comes out and says that (of their view) the spot #Bitcoin ETFs will not be accepted by the SEC this month.

They’re one agency. They is perhaps proper. They is perhaps flawed.

This report is inflicting this selloff in #Bitcoin this morning. pic.twitter.com/K8UMifAsOY

— Caleb Franzen (@CalebFranzen) January 3, 2024

Virtually immediately, BTC took a nosedive, shedding over 7% and dropping beneath $42,000 in a matter of hours. Clearly, the Bitcoin market is breathlessly hinging on any sign associated to the ETF’s prospects, and never with out motive: the monetary product, which might permit conventional finance establishments and buyers to realize publicity to BTC with out holding any cryptocurrency, might interconnect over $14 trillion value of the U.S. financial system with Bitcoin.

Consultants have been fast to swat again in opposition to the Matrixport paper, although, deriding it as primarily based on improper sourcing and defective evaluation. Such analysts remained overwhelmingly assured {that a} Bitcoin ETF shall be accepted this month.

At this level saying SEC rejecting it isn’t simply going in opposition to @JSeyff and I prefer it was within the early days, now you mainly saying a number of mainstream information reporters w a number of sources on within this even have it flawed too. Not saying it’s imposs (once more we nonetheless ‘solely’ at…

— Eric Balchunas (@EricBalchunas) January 3, 2024

Calmed by these reassurances, BTC shortly rebounded again to pre-Matrixport ranges.

“Sir, the Matrixport report introduced #Bitcoin down by $5k quickly. It’s now again at $43k.”

“Okay so what’s subsequent. Approval is imminent we have to get decrease!”

“Subsequent sir? We anticipated a a lot bigger dip however the hodlers do not scare simply. The truth is they purchased extra” pic.twitter.com/kfnWvyLLU3

— EricOfRivia⚡️ (@EricOfRivia) January 3, 2024

Maybe in any case that tumult, determined for a reprieve from all of the ups and downs, many Crypto Twitter denizens started clinging yesterday to a rumor that the SEC was set to approve its first Bitcoin ETF on Friday.

anticipating one thing tomorrow

— Jacquelyn Melinek (@jacqmelinek) January 4, 2024

going to sleep. Hope a spot bitcoin ETF is accepted after I get up

— borovik.eth (@3orovik) January 5, 2024

Alas, although, the respite by no means got here. Whereas all hopeful Bitcoin ETF candidates submitted revised purposes, the SEC had nothing to announce, leaving many in crypto disappointingly set for one more weekend of nail-biting uncertainty.