False Tweet Triggers Short-lived Bitcoin Surge

11/01/2024
bitcoin
bitcoin

SEC Denies Approving Bitcoin ETFs

The US Securities and Exchange Commission (SEC) was forced to deny rumours of approving exchange-traded funds (ETFs) in cryptocurrency after a false announcement on Twitter led to a brief surge in Bitcoin’s value. The misleading tweet, which has been removed, caused Bitcoin to briefly reach almost $48,000 (£37.7K) before falling back to around $46,000 (£36.1K).

The now-deleted tweet claimed that the SEC had approved Bitcoin ETFs for listing on all registered national securities exchanges. SEC chair Gary Gensler quickly refuted this on his personal Twitter account, stating that the SEC’s Twitter account had been compromised and an unauthorised tweet posted. He clarified that the SEC had not approved the listing and trading of spot bitcoin exchange-traded products.

Speaking with the BBC, the SEC confirmed unauthorised activity on the Twitter account and pledged to work with law enforcement and government partners to investigate the incident. The platform where the tweet was posted stated that the breach was not due to its systems, but rather an individual gaining control over a phone number associated with the account via a third party. The account reportedly lacked two-factor authentication at the time.

Bitcoin ETFs: A Long-Awaited Decision

The false announcement wasn’t entirely baseless. The market has been eagerly awaiting the SEC’s decision on a number of spot Bitcoin ETF applications in the US. A Bitcoin ETF would allow investors to engage with Bitcoin’s price movements without directly purchasing the coins. Instead, the ETF would own the coins and issue shares to buyers that track the coin’s value.

With anticipation for the SEC’s decision building, Bitcoin’s value has soared 164% in the past year. Some speculated that the price was being inflated in anticipation of approval, only to be sold off once the decision was made. The false tweet offered a glimpse into how the market might react to approval.

What is a Bitcoin ETF?

A Bitcoin ETF is an exchange-traded fund that tracks the value of Bitcoin without the investor needing to own the coin directly. This option is attractive to those interested in crypto investment without substantial market knowledge or a desire to day trade. The approval process for such a fund is complex and lengthy, requiring approval from the SEC.

The consensus among crypto users is that the approval of Bitcoin ETFs could draw significant investment and boost demand for the coin. Analysts predict that the SEC will approve the applications either in the coming days or early next year. If this happens, the value of Bitcoin could rise. However, some market observers believe it could destabilise the entire Bitcoin ecosystem.

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