Bitcoin experienced a sudden surge in price, jumping from under $28,000 to $30,000 within minutes on Monday. The cause of this rapid increase was a series of unverified rumors circulating on social media that the US Securities and Exchange Commission (SEC) had approved BlackRock’s iShares spot Bitcoin Exchange Traded Fund (ETF) application.
In an intriguing turn of events, popular news outlet Cointelegraph initially reported the news on their Twitter account but later deleted the tweet. It was then reposted, this time with the addition of the word “reportedly,” only to be deleted again. This led to immediate skepticism among Twitter users, who demanded to know the source of the information.
Bloomberg reporter Emily Graffeo shed some light on the situation by stating that BlackRock confirmed that their ETF application is still under review. As the market participants realized the lack of credibility behind the rumors, short positions were opened, causing the Bitcoin price to swiftly retreat back to around $28,000. This sudden price swing represented a significant 7.5% increase followed by a subsequent decrease in just a few minutes.
The susceptibility of the Bitcoin market to social media rumors highlights the current reliance on spot ETF applications. Back in June, numerous financial institutions, including BlackRock, Vanguard, and Fidelity, submitted their own spot Bitcoin ETF applications.
Recently, the SEC’s decision not to appeal a legal loss in a lawsuit with Grayscale over the rejection of their spot Bitcoin ETF application has raised hopes that the regulatory body is preparing for the approval of spot Bitcoin ETFs. The SEC has previously rejected multiple applications due to concerns surrounding market regulation and potential manipulation in the Bitcoin spot markets. However, the tide seems to be turning in favor of spot Bitcoin ETF approvals.
Large Wall Street firms, such as BlackRock, rarely submit ETF applications unless they have confidence in their approval. In fact, the recent round of spot Bitcoin ETF applications included surveillance sharing agreements, granting the SEC increased monitoring powers over the Bitcoin spot markets in the United States. Given the influence that companies like BlackRock hold over US regulators, experts now believe that spot Bitcoin ETF approvals are highly probable in the coming months.
According to a tweet by crypto analyst Jelle, the second deadlines for the SEC to approve various spot Bitcoin ETF applications submitted in June fall on October 16th, 17th, and 19th. However, it is worth mentioning that the SEC tends to postpone decisions until the final deadlines, which are set for mid-March 2024.
