Bitcoin prices recently experienced a rally, surpassing the $28,000 mark and achieving significant gains in the cryptocurrency market. According to CoinDesk data, the world’s most prominent digital currency reached an intraday high of nearly $28,600 at around 6 p.m. EST yesterday. However, it later pulled back and is currently trading below $28,300.
The Role of Fake News
Analysts have pointed out the role played by a fake news report in these recent price movements. Cointelegraph’s Twitter account falsely claimed that the U.S. Securities and Exchange Commission (SEC) had approved an application for an exchange-traded fund (ETF) filed by global asset manager BlackRock. Scott Melker, a crypto investor and analyst, stated that the fake news was responsible for the upward movement and subsequent retrace of Bitcoin’s price. However, Melker believes that the prior move might have been influenced by insiders or a short squeeze.
“Bitcoin was up roughly 4% on the day before the fake news was reported by CoinTelegraph. It is clear that the irresponsible fake news report was responsible for the move up and subsequent retrace, but not necessarily for the prior move. That was likely a result of insiders who knew that the move was coming, unfortunately. Or it was a result of a short squeeze,” said Scott Melker.
Other Factors Impacting Bitcoin’s Price
In addition to the fake news report, other factors have influenced Bitcoin’s recent price movements. Tim Enneking, managing director of Digital Capital Management, mentioned the expiration of the SEC’s deadline to appeal the Grayscale decision earlier this year, which coincided with the initial move caused by the report. He also noted the classic spike and subsequent fall resulting from a short squeeze.
“While the report you refer to certainly drove the initial move, the timing coincided with the expiration of the SEC’s deadline to appeal the Grayscale decision of earlier this year (and that timing may have been deliberate). Then the short squeeze took over and drove the classic spike and, in the usual way for short squeezes, almost immediately fell back,” stated Tim Enneking.
Factors Contributing to Bitcoin’s Price Growth
Cryptocurrency analyst Armando Aguilar emphasized several variables that have contributed to Bitcoin’s price growth. He pointed out a prediction made by James Seyffart, an ETF research analyst for Bloomberg Intelligence, who stated a high likelihood of approval for a spot ETF application submitted by investment manager ARK Invest. Aguilar also highlighted the impact of new institutional products and investments on Bitcoin’s gradual climb in price.
“We believe there’s a 90% chance of approval by Ark’s Jan. 10 deadline,” wrote James Seyffart. Armando Aguilar stated, “This coupled with new institutional products and investments has made BTC slowly climb in price.”
Future Potential of Bitcoin
If the SEC approves an application for a spot Bitcoin ETF, it could have a significant positive impact on the cryptocurrency. Andrew Rossow, an attorney and founder of AR Media Consulting, believes that such approval would bring the crypto market one step closer to mainstream adoption and could have far-reaching effects.
“We’ve seen over the past few years the difficulty in getting the ‘greenlight’ from the SEC, so a report indicating that it has approved a new spot Bitcoin application is likely to have a significant effect upon the overall crypto market and whether we are one step closer to mainstream adoption,” said Andrew Rossow.
