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Fake news on spot Bitcoin ETF approval pumped BTC to $30,000

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On October 16, the media was abuzz with the news that the US Securities Commission (SEC) had approved the US's first spot Bitcoin ETF from iShares. Within minutes, Bitcoin (BTC) went from 28,000 to 30,000. However, 20 minutes later, it turned out to be a fake, and the rate returned to its pre-pump values.

iShares is a collection of exchange-traded funds (ETFs) managed by BlackRock. If you still do not really understand what it is about, read our article: What is a spot bitcoin ETF, and why does everyone talk about it?

Where did the info about US's first spot Bitcoin ETF approval come from

Cointelegraph was one of the first to post the news about the approval of spot Bitcoin ETFs on their X (formerly Twitter). By this moment, the post has been deleted.

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Bloomberg’s analysts, Eric Balchunas, reacted to the tweet and said that the information about it was dubious.

A few minutes later, FoxBusiness reporter Eleanor Terrett refuted the data, saying that BlackRock's application "is still under review."

Cointelegraph apologised for the incident and stated they would conduct an "internal investigation" into why it had happened.

Whether this is true or the media is actually hyping this way is unknown. Perhaps, Cointelegraph will report on it at the conclusion of their investigation. However, this fake has hurt the entire market.

Market reaction on fake spot Bitcoin ETF approval

Since about the beginning of summer, the market has been living with expectations regarding the SEC's decision to launch the first spot Bitcoin ETF. The latest fake news has caused a strong reaction within the market. Below, you can see a one-minute chart of BTC price. Notice how quickly the price rose from $28,000 to $30,000 and returned to its previous values.

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The other major coins followed Bitcoin's lead. For example, ETH rose from $1,585 to $1,639, but then fell to $1,566. As of now, the price of the second cryptocurrency has also got back to its previous level.

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According to Coinglass, the amount of liquidations at that hour exceeded $100 million: about $70 million was lost by those traders who were shorting, and almost $30 million by those who were holding long positions.

Liquidation means the losses incurred by futures traders. In terms of the crypto market, futures trading allows participants to buy or sell cryptocurrencies at a fixed price in the future without owning the coin. In other words, it is a way to bet on price fluctuations. Liquidation occurs when the market moves against a trader's position.

This case is a good reminder of high-risk trading in the crypto market. Be more attentive to your money management.

You might also like:

What is a spot bitcoin ETF, and why does everyone talk about it?


BlackRock’s take on the Bitcoin potential

Maria Kachura
Maria Kachura

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