Although the Bitcoin price briefly nosedived last week on the controversial report by Matrixport that forecasted that the Securities and Exchange Commission will reject all Bitcoin spot ETF filings, the current market sentiment around the long-waited SEC greenlight is decidedly bullish, Polymarket wager suggests.
Polymarket, a platform that lets crypto traders bet on the yes or no outcome of any event, has raked in $7.7 million worth of bets on whether the SEC will approve one or many of the dozens of open applications for Bitcoin spot ETF by January 2024. At the time of writing, the “yes” shares are trading for $0.85, which corresponds to the market’s belief in an 85% chance of a positive decision. Currently, it is the largest prediction pool on Polymarket, with the bet on who will be the Republican presidential nominee for 2024 coming second at $5.9 million.
At the time of writing, there are more than a dozen of ETF hopefuls, most of which have filed this year. Wall Street has been chasing the holy grail of Bitcoin spot ETF for over a decade, but the SEC has been consistently rejecting all proposals, arguing that the crypto market isn’t sufficiently large to prevent manipulation. Should the ETF gain a greenlight from the agency, it is expected to become a game-changer for the biggest cryptocurrency, bringing aboard millions of investors who were previously deterred by the technicalities of crypto exchanges and self-custody.
On Tuesday, the crypto community briefly rejoiced when the SEC’s official crypto account tweeted that 13 Bitcoin ETFs had been approved. However, the SEC’s Chair Gary Gensler quickly cooled down the market optimism by announcing that the account was compromised. The preliminary investigation by Twitter/X found out that the attack vector responsible for the breach was a phone number associated with the account. The Twitter Safety team highlighted that the incident was not due to the internal failing, but rather due to two-factor authentication not being enabled at the time of the hack.
Following the fake news, Bitcoin briefly spiked to a two-year high of $47,680 but went down 2% after the fraudulent tweet was taken down. Despite the false alarm, the general consensus is that the Bitcoin spot ETF is just around the corner: according to Bloomberg ETF analyst Eric Balchunas, the approval announcement may come as early as Wednesday afternoon.
Meanwhile, two US senators J.D. Vance and Thom Tillis have already demanded the SEC Chair to explain the incident. In the letter, Vance and Tillis asked Gary Gensler to answer six questions about the details of the hack and its impact on the Commission’s final decision on the Bitcoin ETF approval. The deadline for the response set by the senators is January 23.
