Matrixport: SEC Set to Reject All Bitcoin Spot ETFs in January

Matrixport: SEC Set to Reject All Bitcoin Spot ETFs in January

SEC likely to reject Bitcoin ETFs, IRS to enforce new crypto tax rules, debate over BRC-20 upgrade, and Saylor's stock option sales.

Welcome to the latest edition of Datawallet Daily. We bring you the main highlights that have impacted the cryptocurrency landscape over the past 24 hours:

Matrixport: SEC Set to Reject All Bitcoin Spot ETFs in January

Matrixport analyst Markus Thielen predicts that the SEC will reject all Bitcoin spot ETF proposals this January, deviating from the widespread market expectation. Thielen’s report emphasizes that despite recent interactions and updated filings between ETF applicants and the SEC, these proposals still don’t meet a critical requirement necessary for SEC approval. 

Thielen bases his view on the current political climate and compliance issues, highlighting SEC Chair Gensler’s stance on the need for stricter regulatory compliance in the crypto industry. Gensler has expressed concerns about widespread non-compliance and fraudulent activities in the crypto sector, suggesting a cautious approach by the SEC towards approving Bitcoin spot ETFs, potentially delaying any approvals until at least Q2 2024.

IRS to Mandate Reporting on $10K+ Crypto Transactions in 2024

Starting in 2024, digital asset transactions over $10,000 in the United States must be reported to the IRS, as mandated by the infrastructure bill signed by President Biden. This law, part of efforts to minimize the tax gap, places new reporting obligations on crypto exchanges and custodians. 

However, Coin Center’s Jerry Brito expresses concerns over the practicality and clarity of these requirements. For example, it is uncertain how miners or those engaging in decentralized exchanges should report transactions, especially when the sender’s details are unknown. Coin Center suggests a de minimis exemption for smaller transactions and cautions against applying these rules to second parties in crypto transactions. This expansion of reporting requirements could complicate compliance for many in the crypto industry.

BRC-20 Marketplace and Creator Clash Over Upgrade Proposal

A rift is brewing in the Bitcoin developer community with marketplace UniSat and BRC-20 creator Domo taking opposing stances on a proposed network upgrade. UniSat announced its decision to adopt the Ordinals Jubilee upgrade for BRC-20, a token standard on the Bitcoin network that enables the issuance of transferrable tokens via inscriptions on BTC. This move contradicts Domo’s suggestion to freeze BRC-20 at version 0.9, arguing that rushing updates could harm users. 

The disagreement could result in two versions of BRC-20 coexisting on the same blockchain, potentially leading to complex cross-affecting scenarios, as described by UniSat on X (formerly Twitter). 

Saylor Begins Selling $216M in MicroStrategy Stock Options

Michael Saylor, executive chairman of MicroStrategy, has initiated the sale of $216 million worth of the company’s stock options. According to an SEC filing, he plans to sell 310,000 stock options awarded in 2014, set to expire in April. During MicroStrategy’s third-quarter earnings call, Saylor announced his intention to sell up to 5,000 shares daily over four months, subject to a minimum price condition. 

He aims to use the proceeds for personal obligations and to purchase additional Bitcoin for his personal account. Despite this sale, Saylor’s equity stake in MicroStrategy, the largest corporate holder of Bitcoin, remains substantial. MicroStrategy’s shares rose 8.5% amidst a general downturn in crypto-focused stocks.

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