Executive Summary
Daily Coin Post, renowned for its prescient forecasts, defied consensus expectations throughout 2023 by boldly predicting that Bitcoin would surge to $45,000 by Christmas. Anticipating a potential rally to $50,000 by the end of January 2024 if all SEC requirements for Bitcoin Spot ETFs were met, Daily Coin Post closely monitored the frequent meetings between ETF applicants and SEC staff. Despite applicants refiling their submissions, Daily Coin Post maintains that a crucial requirement remains unfulfilled, predicting the SEC’s rejection in January 2024, with potential fulfillment by Q2 2024.
The pivotal leadership of the SEC’s five-person voting Commissioners, currently dominated by Democrats, plays a decisive role in ETF approval. SEC Chair Gensler, displaying a cautious stance towards crypto, casts doubt on the likelihood of approving Bitcoin Spot ETFs. Despite the potential for an ETF to catalyze crypto’s ascent, Gensler’s reservations, expressed in December 2023, suggest a preference for more stringent compliance and reluctance to legitimize Bitcoin as an alternative store of value.
Since traders began anticipating an ETF approval in September 2023, an influx of at least $14 billion in fiat and leverage has flowed into crypto, with $10 billion attributed to ETF approval expectations. The prospect of SEC denial could trigger cascading liquidations, unwinding the $5.1 billion in additional perpetual long Bitcoin futures and potentially causing a rapid -20% decline, reverting to the $36,000/$38,000 range. In such a scenario, envisioning a 20% red candle on the Bitcoin price chart becomes a plausible outcome. The ensuing panic among traders and investors attempting to mitigate potential losses could result in a significant market downturn.
In the absence of any approvals by Friday, January 5, 2024, Daily Coin Post recommends that traders hedge their long exposure by acquiring $40,000 strike puts for the end of January or consider outright short positions in Bitcoin through options.
Even if the SEC denies the ETF, Daily Coin Post maintains its expectation of higher Bitcoin prices by the end of 2024 compared to the year’s beginning ($42,000). Citing the positive trends during US election years and Bitcoin mining cycles, Daily Coin Post remains optimistic about the cryptocurrency’s long-term trajectory.
