Polymarket ETF Odds Drop to 70%, BTC Experiences 8% Flash Crash on Matrixport Forecast

Polymarket betting odds on the approval of pending spot Bitcoin exchange-traded funds (ETFs) briefly fell to 70% on January 3rd.

On the question of whether a spot Bitcoin ETF will be approved by January 15, Polymarket announced a “yes” result at 1:30 p.m. UTC on January 3, with a price of $0.70. Polymarket data and various other reports suggested a “yes” result. The price was $0.89 on January 2nd. Recent data from Polymarket suggests that “Yes” is currently at $0.84.

Bitcoin ETF approved by January 15th? — Polymarket

So far, Polymarket users have wagered $912,569 on this market, but it is unclear how many people have placed bets in total.

A conflicting report may be responsible for the decline

The decline in Polymarket's “yes” ratings may be related to a contrarian report from Matrixport analyst Markus Thielen published on January 3rd.

Thielen argued that the US Securities and Exchange Commission may reject all outstanding spot ETFs for political reasons. He noted that many SEC commissioners are members of the Democratic Party (which is often considered anti-cryptocurrency) and highlighted SEC Chairman Gary Gensler's hostility towards cryptocurrencies. Thielen also asserted that pending applications do not currently meet a critical requirement, but did not identify the requirement in question.

Still, Polymarket's odds represent an overwhelming chance of approval. Its current odds of 84% are roughly in line with a forecast from ETF analysts at Bloomberg, who say there's a 90% chance the SEC will approve at least one ETF , if it decides on Ark Invest's application by January 10th.

By the way, Bloomberg ETF analyst Eric Balchunas reacted to Thielen's report. As evidence of the approval, he pointed out that the SEC had worked extensively with the applicants and that at least three commissioners were in favor of the approval.

Polymarket may represent a more balanced view than either source. Since Polymarket's odds are determined based on user positions, they reflect the opinion of multiple people rather than a single person.

Bitcoin also experienced an 8% flash crash

Falling Polymarket odds coincided with a 7.9% flash crash that caused the price of Bitcoin (BTC) to fall from $45,421 to $41,804 in a matter of hours.

Bitcoin (BTC) prices for January 3 – Source: CoinGecko

Once again, Thielen's comments may have contributed to this price drop. However, some have also pointed to CNBC personality Jim Cramer's positive comments about Bitcoin as a potentially damaging price. Cramer developed a reputation for being frequently wrong, which led some investors to act contrary to his opinion, according to the “Inverse Cramer Effect.”

Since then, Bitcoin has partially recovered to $42,967 from 22:00 UTC. Further fluctuations can be expected with further important news surrounding a spot Bitcoin ETF.

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