How a False Tweet Sent Bitcoin Prices Skyrocketing
Posted on 17/10/2023 | 1026 Views
Amid the escalating anticipation surrounding the transformation of Grayscale's Bitcoin (BTC) trust into an ETF, an unexpected tremor hit the crypto sector. Bitcoin prices skyrocketed, surging by an astonishing 10% on the back of a misleading report regarding BlackRock's ETF approval.
As dawn broke in the Eastern Time zone, Bitcoin was teetering on the brink of $30,000, propelled by rampant rumours about an ETF sanction. Currently, Bitcoin is up by 5% overnight, sitting at US$28k (AU$44.7k). At its peak today, it grazed US$30k, a fleeting 6% escalation within a mere 15 minutes, marking a 10% uplift from its previous trading day. This ripple effect was evident across the crypto spectrum with major players like Ethereum all mirroring Bitcoin's upward trajectory.
The catalyst? A tweet from the renowned crypto news platform, Cointelegraph, erroneously announcing that the U.S. Securities and Exchange Commission (SEC) had given its nod to BlackRock’s iShares Bitcoin Trust ETF. The whirlwind began when Cointelegraph, without citing any concrete sources, put out this information, leading analysts into a frenzy trying to validate these claims. However, in a twist, the media giant retracted its statement, not only removing the tweet but also issuing an official apology. Their statement read, "We apologise for a tweet that led to the dissemination of inaccurate information regarding the Blackrock Bitcoin ETF,” and they revealed that an “internal investigation is currently underway.”
In a counter-response, BlackRock clarified via an email communication that its ETF was still under the SEC's microscope, awaiting its final judgment. The euphoria was short-lived as Bitcoin prices took a nosedive once reputable sources and ETF pundits reaffirmed the SEC's non-approval stance on the matter.
The fallout was colossal. Onchain data highlighted the staggering $79 million in short positions that were liquidated in the mere hours succeeding the tweet's release. A cumulative of $136.5 million in positions were dissolved within a day. It's pertinent to note that BlackRock, a financial behemoth managing assets north of $9.5 trillion, had tabled its application for a spot Bitcoin exchange-traded fund earlier in June.
The allure of a potential Bitcoin ETF has institutional investors on tenterhooks. Their considerable investments contributed to Bitcoin scaling a 12-month peak. Yet, the SEC has consistently postponed its verdict on the plethora of Bitcoin ETF proposals it has received. The consensus is clear: Major stakeholders are vying for a Bitcoin ETF as it offers an avenue into the crypto world without the intricacies of storage solutions. An SEC approval could usher in a deluge of investments, catapulting Bitcoin prices – as we witnessed a mere glimpse of.
While a spot Bitcoin ETF hasn't arrived in the U.S. just yet, anticipation is rife. We caught a glimpse of its potential price impacts just last night.
Remember to subscribe to this newsletter and follow us on social for regular updates on the dynamic world of blockchain and cryptocurrency. If you're interested in an easy and personal way to buy/sell/swap cryptocurrency, don't hesitate to contact us – call 1800 AINSLIE. Our team of friendly consultants are ready to guide you, your company, or SMSF through the process, making your cryptocurrency buying journey effortless. We also offer industry-leading crypto custody with minute-by-minute internal audits to guarantee the safety of your assets.