The Turmoil and Controversy of the Crypto Market: A Report That Sparks Fear

Recently, a well-known encryption asset service provider released a report on Bitcoin spot ETFs, triggering widespread discussion and volatility in the market. The report predicts that the U.S. Securities and Exchange Commission will reject all Bitcoin spot ETF applications in January and may not grant final approval until the second quarter of 2024. The report also suggests that investors consider shorting Bitcoin, anticipating its price may fall to the range of $36,000 to $38,000.

The report, once released, immediately attracted widespread attention and coverage from industry media both domestically and internationally. As a result, the crypto market experienced significant fluctuations. The price of Bitcoin rapidly fell from a high of $45,000 to around $40,000, plummeting $5,000 in a short period. According to statistics from a certain data platform, within 4 hours of the report's release, the total liquidation amount across the network reached $531 million, with the liquidation amount for long positions being $496 million and for short positions being $35.3799 million. Major cryptocurrencies such as Bitcoin, Ethereum, and Solana all experienced a large number of liquidations.

However, the views in this report are not shared by all market analysts. A well-known analyst who has been closely following the progress of Bitcoin spot ETF approvals stated that he personally has not seen any signs that an ETF is about to be rejected, and instead believes that the likelihood of approval is quite high. He also questioned the sources and basis of the report, pointing out that the company had previously maintained a bullish stance on Bitcoin, and the sudden release of opposing views is puzzling.

The analyst further explained that if the U.S. Securities and Exchange Commission intends to delay or reject the Bitcoin spot ETF, it will not hold meetings with major exchanges to discuss the details of the ETF issuance. He believes that regulators have been in close communication with the issuers to refine the application materials, and these are all positive signals.

Some industry insiders have compared this report to research institutions that previously focused on shorting Chinese concept stocks. These short-selling institutions typically release impactful reports containing a large amount of data and field investigation evidence to influence the stock prices of target companies. However, even if the target companies have no substantive issues, the stock price declines triggered by such reports can still pose a severe blow to the listed companies.

It is worth noting that shorting the market is not a lawless territory. In February 2022, the U.S. Department of Justice launched investigations into several short-selling firms to determine whether they were illegally lowering stock prices by prematurely sharing short-selling reports or engaging in illegal trading strategies. In the crypto market, if certain tokens are classified as securities, shorting them may carry legal risks.

In response to the controversial report, the founder of the publishing agency later made a statement. He indicated that the company's analysts operate independently, expressing their own views without being influenced by management. He also emphasized that the report was originally intended only for VIP clients, and its widespread dissemination in the media was neither planned nor controlled by the company.

However, this explanation has also sparked doubts. Some believe that as a professional encryption asset service organization, it seems unreasonable to allow analysts to fully independently publish reports that may impact the market. At the same time, in the current market where optimism is prevalent, recommending short-selling strategies to VIP clients is also perplexing. Moreover, the way the report has been widely covered by the media in a short period has led to speculation about its dissemination intentions.

In any case, this event once again highlights the complexity and volatility of the crypto market. Investors need to remain rational and cautious when faced with various market information, thoroughly assessing risks and opportunities. At the same time, the behavior of market participants should also be subject to appropriate regulation and constraints to maintain the fairness and stability of the market.