Recent events in the cryptocurrency industry sent shockwaves through the market, triggered by false information disseminated by Cointelegraph regarding the approval of a spot Bitcoin ETF.
The erroneous report swiftly fuelled a substantial but fleeting surge in Bitcoin’s price, briefly reaching $30,000.
However, BlackRock clarified that its iShares application for the ETF is still under review by the United States (US) Securities and Exchange Commission (SEC).
This led Bitcoin to retrace its steps, settling at $28,000, amidst scepticism from analysts and reporters.
The misleading post was deleted approximately 30 minutes later, but the impact on prices had already been substantial.
Bloomberg analyst James Seyffart promptly refuted the credibility of this information mere moments after the surge:
“This is fake news; I can’t find anything that would confirm this at the moment. BlackRock has just confirmed to a FOX reporter that this is false; their application is still under review.”
Fox Business journalist Eleanor Terrett also posted on X (formerly known as Twitter):
“BlackRock has personally confirmed to me that this information is entirely false. Their application remains in the review stage.”
The aftermath was particularly harsh for investors who had acted hastily due to Fear of Missing Out (FOMO).
They rushed to purchase Bitcoin during its brief surge, only to face significant financial losses once the truth emerged.
Compounding the market’s turbulent environment, data analytics firm Look On-Chain reported an incident involving a cryptocurrency whale.
Prompted by the fake ETF news, this individual hastily acquired 20.5 wrapped Bitcoin (WBTC) out of FOMO.
Realising the misinformation, the whale quickly liquidated the holdings, incurring a $49,000 loss within a mere 10-minute timeframe.
Initially, the whale had invested 613,201 USDC (a stablecoin pegged to the US dollar) for the WBTC but sold the assets for only 563,970 USDC.
CoinGlass data further indicates that this price oscillation led to the liquidation of $81 million worth of short positions (bets against rising prices) during the move to $30,000, as well as $31 million in long positions (bets on rising prices) during the subsequent correction.
Liquidation occurs when an exchange forcibly closes a leveraged position due to a partial or total loss of the trader’s initial margin.
Of note, the SEC website offers no record of approvals for a spot Bitcoin ETF.
Bloomberg’s report concurs, confirming that the BlackRock application remains under the regulatory body’s review.
Meanwhile, the SEC has not contested a recent court ruling that favoured Grayscale Investments in relation to its spot Bitcoin ETF proposal.
Cointelegraph extended its apologies to its readers and delved into an in-depth investigation surrounding the events that culminated in the publication of unverified news concerning a spot Bitcoin ETF.
Cointelegrapgh took an extra step to detail the timeline of how the events went down.
Extracted from Cointelegraph’s clarification news