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- False reports of SEC approval for BlackRock’s iShares spot Bitcoin ETF briefly boosted Bitcoin to $30,000, but the price quickly retracted upon debunking the news.
- BlackRock CEO Larry Fink commented on the development stating “Today’s Bitcoin rally is a flight to quality”.
On Monday, October 16, the Bitcoin price shot all the way up to $30,000 as news broke out that the US SEC has approved the BlackRock iShares spot Bitcoin ETF. The news added more fuel to the already upbeat Bitcoin price.
However, BlackRock confirmed soon that the news outbreak was fake and that there’s no such approval from the SEC for the moment. The Bitcoin price made a strong retracement within minutes falling back to $28,000 and has been trading above it.
Popular crypto news publication CoinTelegraph was the first to report the news causing a major buzz in the crypto space. Cointelegraph’s social media team erroneously claimed SEC approval for BlackRock’s iShares Bitcoin ETF without editorial approval. The misinformation was sourced from an unverified Bloomberg Terminal screenshot shared by an X user.
CoinTelegraph has issued a clarification on this matter stating that their internal investigation team is working on this matter. They have also given detailed explanations as to how things spread from one employee to another. Interestingly, the U.S. Securities and Exchange Commission (SEC) has also chipped in on the developments warning users to be careful about the fake news.
Careful what you read on the internet. The best source of information about the SEC is the SEC.
— U.S. Securities and Exchange Commission (@SECGov) October 16, 2023
Bitcoin – A Flight to Quality
Yesterday’s developments were just a glimpse into how keenly the community has been waiting for the spot Bitcoin ETF to come to the market. The developments also drew comments from BlackRock CEO Larry Fink himself.
In an appearance on Fox Business, later on Monday, Fink said: “It’s just an example of the pent-up interest in crypto. I think the rally today is about a flight to quality. More people are running to flight to quality whether that’s on Treasuries, gold, or crypto.”
Many industry experts also further stated that the developments hint at the fact that the Bitcoin price will moon in the case that the SEC would actually approve a spot Bitcoin ETF. Many market analysts believe that the approval of a spot Bitcoin ETF could lead to trillions of dollars flowing into Bitcoin.
Bloomberg Intelligence ETF analyst James Seyffart said: “This was like a dry run for what’s going to happen if these things actually do get approved. It basically gave traders a playbook”. Seyffart further added that he expects a bunch of spot Bitcoin ETF approvals by January 2024.
Bitcoin short Squeeze
Coinglass data indicates that over the past 24 hours, approximately $95 million worth of Bitcoin positions, primarily held by traders who were speculating on declining prices, were liquidated.
The fake bitcoin spot ETF approval news liquidated $29.5 million in BTC shorts in ~17 minutes.
Whichever intern at Cointelegraph tweeted it just
a) got fired, and
b) made a bag by going levered longWhat a time to be alive 😭 pic.twitter.com/JAcg5MtsNh
— Joe Consorti ⚡ (@JoeConsorti) October 16, 2023
Noelle Acheson, the author of the Crypto Is Macro Now newsletter, expressed her belief that now, with progress being made on the ETF front, the market will begin to incorporate these developments into its pricing. She also foresees that some individuals will turn to Bitcoin as a means to hedge against geopolitical and economic uncertainties.
Recent advancements related to spot ETFs have played a significant role in driving some of Bitcoin’s most notable rallies in 2023. In June, the digital asset surged above $30,000 as prominent players, including BlackRock and Fidelity Investments, pursued SEC approval to launch these funds. Recently, Grayscale has been pushing the envelope further for converting its GBTC product into a spot Bitcoin ETF.
