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Within 24 hours of a fake report driving up the price of bitcoin by 10%, investors panicked and sold off $85 million worth of cryptocurrency


A fake news report. That's all it took for Bitcoin to briefly jump 10% on Monday and result in investors panic selling $85 million crypto within just 24 hours.

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What Was The Fake Report About?

blackrock bitcoin cryptotimes

fake news report incorrectly asserted that BlackRock Inc. had received the green light to launch a spot exchange-traded fund in cryptocurrency. However, the US SEC clarified that the Bitcoin ETF application is still under review.    

Also Read: Goldman Sachs Lends Its First Bitcoin-Backed Loan

Who Spread The Fake News Report?

In a now-deleted tweet, crypto-focused news outlet CoinTelegraph reported the fake news on Twitter: "BREAKING: SEC APPROVES ISHARES BITCOIN SPOT ETF." CoinTelegraph followed up with a tweet, saying: "We apologize for a tweet that led to the dissemination of inaccurate information regarding the Blackrock Bitcoin ETF. An internal investigation is currently underway."

We apologize for a tweet that led to the dissemination of inaccurate information regarding the Blackrock Bitcoin ETF.

An internal investigation is currently underway. We are committed to transparency and will share the findings of the investigation with the public once it is…

— Cointelegraph (@Cointelegraph) October 16, 2023

When Did Blackrock Submit The Bitcoin ETF application?

In June, Blackrock submitted an application for a spot-Bitcoin ETF. While the news of Blackrock receiving approval may have been bogus, the money at stake was real! Data from tracker Coinglass shows that more than $85 million worth of trading positions, mostly from traders who were betting on lower prices, were liquidated over the past 24 hours, as per a Bloomberg report.

This episode adds to the ongoing discussion about whether the market has actually priced in the introduction of an exchange-traded fund tracking the largest digital coin. While misinformation is commonplace in a sector favored by fraudsters and proponents of digital currency alike, this incident is unfortunate. It also highlights regulators' worries that small-scale investors lack fundamental safeguards in the crypto Wild West, a problem that has in the past fueled the Securities and Exchange Commission's reluctance to open up the market.

bitcoin getty

Also Read: US Man Pays 10,000 Bitcoins For Pizza

How Much Did Bitcoin Jump?

Bitcoin jumped 10% to a level above $30,000, its highest level since July, after a handful of tweets propagating unfounded news pushed the price up. The coin then pared those gains to trade around $28,300—just about where it had been before the incident—after BlackRock said its ETF application was “still under review” by regulators. It is currently at 28,466.70.

This specific incident occurs at a time when American investors' hopes are at an all-time high that a spot-Bitcoin ETF will indeed become available soon. Since about ten years ago, issuers have attempted to launch a US spot-Bitcoin ETF without success. Market manipulation and fraud have been mentioned by regulators as some of the causes of prior denials, as per the report.

However, that hasn't stopped businesses from trying to capitalise on what may ultimately amount to billions of dollars in inflows. Over the years, many issuers have worked on their applications—or on approaches to placate regulators—in the hopes of launching such a fund. There are currently more than ten applications pending for a spot Bitcoin ETF, and many analysts think that the likelihood of approval is higher because BlackRock and other industry titans like Invesco and Fidelity are currently competing.

For the latest and more interesting financial news, keep reading Indiatimes Worth. Click here

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