The price of Bitcoin (BTC) jumped by more than 10% on Monday, reaching as high as $30,000, after a rumor spread that the U.S. Securities and Exchange Commission (SEC) had approved the first spot Bitcoin exchange-traded fund (ETF).
The rumor was first reported by Cointelegraph, a crypto news outlet, which claimed that the SEC had approved the iShares spot Bitcoin ETF, a product proposed by BlackRock, the world’s largest asset manager. The report cited an unnamed source and did not provide any official confirmation or evidence.
This news significantly influenced the value of Bitcoin, causing it to surge from $27,700 to $29,900 per coin, before falling to slightly above the $ 28,000 mark. The rapid increase in Bitcoin’s price was a direct result of the widespread dissemination of this news on social media platform X, primarily through a post by Cointelegraph that went viral.
Spot ETF Approval Confirmed as Fake News
The news quickly spread across social media and other crypto news platforms, causing excitement and speculation among investors and traders. In the meantime, Cointelegraph has expressed regret for the incident related to the “tweet”. An internal inquiry is currently underway to determine the circumstances surrounding the event.
We apologize for a tweet that led to the dissemination of inaccurate information regarding the Blackrock Bitcoin ETF.
An internal investigation is currently underway. We are committed to transparency and will share the findings of the investigation with the public once it is…
— Cointelegraph (@Cointelegraph) October 16, 2023
Many believed that the approval of a spot Bitcoin ETF would boost the demand and legitimacy of the cryptocurrency, as well as provide an easier and safer way for institutional and retail investors to access the market.
However, the rumor was false, as Bloomberg analysts Eric Balchunas and James Seyffart debunked it shortly after. They said they could not find any proof or confirmation of the SEC’s approval of the iShares spot Bitcoin ETF, and suggested that it was a case of misinformation or fake news.
Fox Business now reporting reports false, BlackRock says application still under review. https://t.co/5XWn65qlVt
— Eric Balchunas (@EricBalchunas) October 16, 2023
They also pointed out that the SEC had not yet made any decision on the pending applications for spot Bitcoin ETFs, which are still under review. They estimated that there was a 90% chance of a spot Bitcoin ETF approval by January 2024, based on the recent developments in the Grayscale vs SEC legal battle.
In the wake of the news, Bitcoin prices experienced a significant increase, leading to the liquidation of short positions worth over $100 million. Coinglass data reveals that during the hour when Bitcoin reached the $30k mark, total liquidations exceeded $112 million.
This included the liquidation of short positions worth more than $78 million and long positions amounting to $34 million. Specifically, Bitcoin accounted for over $64 million of the liquidated amount.