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Desire for Spot Bitcoin ETF Sees Price Soar on False Approval Report

After Cointelegraph posted on X to say that the BlackRock spot bitcoin ETF had been approved by the SEC, BTC price jumped by 7% before falling back to its original level. BlackRock’s CEO said this demonstrated the “pent-up interest in crypto.”

Spot Bitcoin ETF Sees Price Soar on False Approval Report Cointelegraph

The price of bitcoin jumped to almost $30,000 based on an incorrect report that BlackRock’s application for a spot bitcoin exchange-traded fund (ETF) had been approved by the U.S. Securities and Exchange Commission (SEC). Cointelegraph jumped the gun on a piece of unverified news, supposedly from the Bloomberg Terminal, and posted it on the X social media platform.

Cointelegraph has nearly 2 million followers on the platform, and though the message was deleted within about 30 minutes, traders had already piled in on the original cryptocurrency. Price spiked by 7%, almost hitting $30,000 for the first time since July. Once news spread that the report was false, the price quickly dipped back below $28,000, before returning to its original level.

According to data from CoinGlass, $84 million of short positions were liquidated across various exchanges as the price rose, followed by $31 million of long positions being liquidated during the correction.

Liquidation occurs when price movement goes against a trader’s prediction, meaning they cannot meet the margin requirements for a leveraged position. The exchange will then forcibly close the position at a loss to the trader.

BlackRock CEO Larry Fink later commented on the affair, claiming that the event showed the pent-up desire for a spot bitcoin ETF.

“It’s just an example of the pent-up interest in crypto. I think the rally today is about a flight to quality.”

Many were less optimistic about the affair, voicing concerns that it would give SEC chair Gary Gensler added ‘proof’ that volatility in the market was still at a level that justified the continued refusal of spot bitcoin ETFs.

As we Observed just last week, the SEC decided not to appeal against the court's ruling that its refusal of Grayscale’s spot bitcoin ETF was “arbitrary and capricious”. This means that the regulator must review this decision, along with several other open applications from various fund managers including BlackRock.

Whether this latest misfire has any influence on the SEC’s eventual decisions regarding these pending applications remains to be seen.

Following the debacle the SEC somewhat smugly issued a post on X reminding users to be careful what they read on the internet, adding that “The best source of information about the SEC is the SEC.”

Several users took the opportunity to highlight a 2010 article on the ABC News website regarding SEC staff accessing porn websites in office hours rather than stopping fraud.