Bitcoin prices spike 10% over fake news

[Image source: Gettyimagesbank]

Unverified fake news sent the Bitcoin market on a roller coaster ride on Monday, with the Bitcoin price surging 9.74 percent in the space of around seven minutes to hit the $30,000 mark later the same day after it was reported that BlackRock Inc.’s application for a spot Bitcoin exchange-traded fund (ETF) had been approved. But the market pared all its gains within 20 minutes as the report turned out to be unverified.

About $70 trillion in market cap was created and wiped out, and more than $100 million in futures position liquidated in the Bitcoin futures market, in the wake of the news.

According to crypto market information site CoinMarketCap, Bitcoin was trading at $28,138 on Tuesday at 3:30 p.m., up 1.07 percent from the previous day. Bitcoin’s price has fallen back to the $28,000 level after temporarily soaring past $30,000 on Monday night.

The volatility spike in Bitcoin began on Monday evening, when U.S. crypto coin tracker CoinTelegraph posted on X, formerly known as Twitter, that BlackRock’s application for a spot Bitcoin ETF, the iShares Bitcoin Trust, had been approved by the U.S. Securities and Exchange Commission (SEC). The post sent Bitcoin up nearly 10 percent in about seven minutes, and the price on Upbit Korea, the local Bitcoin exchange, was traded above 40 million won ($29,498.5) for the first time since July 14.

But the price started tumbling after U.S. economic outlets such as Bloomberg and Fox Business raised the possibility of fake news. “BlackRock said its application for a spot ETF is still under review,” Fox Business reporter Eleanor Terrett wrote on her X page, adding that she received confirmation from BlackRock that the news is false, and its application is still under review by the SEC.

CoinTelegraph fell for the rumor and created fake news, with CoinTelegraph’s own investigation finding that one of its employees shared a fabricated Bloomberg article about the spot ETF approval on an internal messenger and the report went out. CoinTelegraph took the article down and issued an apology an hour after it was published. After the rumor was revealed to be false, the market saw a selloff amid the disappointment. Bitcoin retraced its gains in less than 20 minutes, falling back to the $28,000 level, and about $140 million in futures longs and shorts were liquidated. A large number of liquidations in futures positions took place due to the sharp rise and fall in prices within a short period.

The false news has also created a negative outlook for Bitcoin spot ETF approval in early 2024. Anthony Sassano, co-founder of EthHub, noted that the incident validates the SEC’s concerns over market manipulation in the crypto market.