Bitcoin Price Surges on False SEC Approval Rumor, then Plummets
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In a rollercoaster ride for the world’s largest cryptocurrency, Bitcoin experienced a sharp surge on Monday, October 16, 2023, after a false report briefly suggested the U.S. Securities and Exchange Commission (SEC) had granted approval for a spot bitcoin exchange-traded fund (ETF) from BlackRock, the globe’s largest asset manager. However, this hopeful ride was soon followed by a disappointing drop, as both BlackRock and the SEC denied the rumors.
False Alarm
CoinTelegraph, a well-known crypto news outlet, reported on Monday that the SEC had given the green light to BlackRock’s iShares Bitcoin ETP application, a move that would enable investors to buy and sell shares of a fund directly holding Bitcoin. This news shot Bitcoin to $30,300 on Gemini, its highest value since late July, only for CoinTelegraph to backtrack and issue an apology for their misinformation. An internal investigation is now in progress.
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
BlackRock, on the other hand, confirmed to Reuters that its application is still under review by the SEC. Close sources within the SEC also dispelled the rumors of approval. Furthermore, Fox Business reporter Eleanor Terret tweeted about BlackRock CEO Larry Fink’s denial of the report while expressing optimism about the future of cryptocurrency.
🚨NEW: BlackRock CEO Larry Fink on the @Cointelegraph report and #crypto:
“I was busy all day, I only heard it an hour ago.”
“It’s an example of the pent up interest in crypto.”
“We’re hearing from clients around the world about the need for crypto.”
“Crypto will play the…
— Eleanor Terrett (@EleanorTerrett) October 16, 2023
Bitcoin’s price subsequently plunged, settling around $28,400, up 0.78% from the previous day, according to data from CoinMarketCap. This price swing underscores the crypto market’s anticipation and sensitivity to potential regulatory developments, particularly in the U.S., where several spot BTC ETF applications hang in the balance.
Crypto Market Still Expectant of a Spot Bitcoin ETF Approval
A spot Bitcoin ETF holds the promise of granting investors easier access to Bitcoin without confronting the technical challenges of direct purchase and storage. Moreover, it could bring greater liquidity, transparency, and legitimacy to the crypto sector. Nevertheless, past rejections from the SEC were due to concerns over market manipulation, fraud, and safeguarding investors.
The crypto community remains hopeful that the SEC will eventually greenlight a spot BTC ETF, as it has for several bitcoin futures ETFs recently. For now, Bitcoin investors must prepare for further market fluctuations and uncertainty.
