Today’s cryptocurrency market felt the selling pressure from a report published by Matrixport, causing Bitcoin (BTC) to drop to $40,750 and altcoins to suffer double-digit losses. The increased risk appetite and inflated prices hinted at a possible correction, but the magnitude of the drop was unexpected.
Jihan Wu, co-founder of Matrixport, commented on the downturn, stating that their analysts operate independently without management influence. He acknowledged the analytical skills of his team, particularly an analyst named Markus, who authored a detailed study on the price history of cryptocurrencies last year.
Matrixport was among the few that accurately predicted Bitcoin’s bottom at the start of 2023 and maintained a bullish stance. The recent report was intended for Matrixport clients and its widespread media circulation was unplanned and beyond their control.
Wu mentioned that Matrixport consistently advises clients to be cautious with risks and leverage, especially considering market volatility influenced by expectations around Exchange-Traded Funds (ETFs). This volatility is evident in the high funding fees in the market and the recent decline in crypto-related stocks on exchanges.
Despite the current fluctuations and the uncertainty surrounding the potential approval of a Bitcoin ETF in January 2024, Wu believes that in the long run, Bitcoin will prevail. He is confident that the approval of a spot Bitcoin ETF by the SEC is inevitable, which will attract new investments to Bitcoin, solidifying its position as a store of value and a superior hedge against risk compared to gold.
Bitcoin’s price seems unaffected by Wu’s comments amidst news of an SEC meeting with exchanges. While investor concerns over a price drop persist, the silver lining is that open interest has retreated to levels seen when BTC prices were much lower, suggesting that an ETF approval could potentially lead to a rapid price increase supported by futures markets.
