Bitcoin took investors on a wild ride Monday, with a dramatic surge in price followed by a sharp correction, all triggered by inaccurate reporting surrounding the U.S. Securities and Exchange Commission (SEC) and asset manager BlackRock. The cryptocurrency, renowned for its volatility, initially soared to $29,900, marking its highest value in over five months, before plummeting back to $28,211 by the end of the trading day.
The rollercoaster of Bitcoin began when crypto news outlet Coin Telegraph erroneously reported that the SEC had approved the application of BlackRock for a crypto investment product. The market reacted swiftly, rallying on the potential news of a spot bitcoin ETF. However, BlackRock later clarified that their “iShares Bitcoin ETP application is still under review by the SEC.” The SEC also confirmed that the application remains pending.
Ben Laidler, global markets strategist at eToro, commented on the market’s hypersensitivity to such developments, saying, “Crypto markets have just shown how sensitive they are to any potential good news, with their premature rally today on rumors of the approval of a spot bitcoin ETF.”
Coin Telegraph issued an apology for the inaccurate report and pledged to conduct an internal investigation, with findings expected within three hours. Their false report demonstrated the challenges and consequences of inaccurate or unverified news in the crypto market.
The crypto community has been closely monitoring the SEC’s stance on pending spot bitcoin ETF applications, which could significantly impact the industry by attracting more institutional investment. Historically, the SEC has consistently denied these applications due to concerns about inadequate investor protection against market manipulation. Joseph Edwards, Head of Research at Enigma Securities, emphasized, “The move does show how monomaniacally obsessed the bitcoin market is with the coming spot ETFs.”
Lucas Kiely, Chief Investment Officer at Yield App, considered the false alarm a “good dress rehearsal” for when the SEC eventually delivers a final decision on the applications. Kiely’s perspective aligns with recent news that the SEC chose not to appeal a court ruling that deemed their rejection of Grayscale Investments’ spot bitcoin ETF application as incorrect. This development opens the door for Grayscale’s application to be reconsidered, possibly within the coming week, and lays the groundwork for the SEC to finalize its decision.
Monday’s price fluctuations highlighted the crypto market’s susceptibility to unverified reports and rumors. Investors seeking substantial and sustained changes in the cryptocurrency market will have to exercise patience until the SEC provides an official and definitive ruling on the fate of spot bitcoin ETFs. In the meantime, the crypto world remains on the edge of its seat, knowing that one piece of news can trigger dramatic market shifts.
Source: Reuters
