Bitcoin Market Rattles After Misleading ETF Approval Tweet; Investor Interest Grows
Summary:
This article discusses the impact of misinformation about the approval of all spot Bitcoin exchange-traded funds (ETFs) by the SEC which led to a surge and subsequent dip in Bitcoin's value. Analysts anticipate the market manipulation laws may have been contravened by this incident, stirring demands for accountability. Despite the confusion, the likelihood of Bitcoin ETF approval generates positive market sentiment. The article also highlights increased interest from both institutional and retail investors in Bitcoin.
Bitcoin's value surged past $48,000 after misinformation about the approval of all spot Bitcoin exchange-traded funds (ETFs) by the SEC was mistakenly tweeted. Before the SEC had an opportunity to rectify the situation, the value of Bitcoin decreased towards $45,000. This trend supported theories that suppose the approval event would result in a sell-out reaction from traders. Unfortunately, the tweet, which was not authorized, came from a compromised SEC Twitter account, causing a stir among investors and cryptocurrency enthusiasts.
This incident sparked outrage in the cryptocurrency community. Some likened it to a manipulative pump-and-dump scheme. Observers and crypto-enthusiasts are claiming that the SEC might have contravened market manipulation laws following the incident, and Senator Bill Hagerty is already demanding an explanation from the regulatory body. He argues that the same level of accountability that would be required from a public company in the event of such market-impacting error should apply to the SEC.
Although the expectation of a Bitcoin ETF approval has positively influenced the market, certain investors suspect that such an event may primarily benefit those buying into the rumor and selling when the news breaks, as was evidenced in real-time with the incorrect approval messages. When it became public knowledge that the SEC's social media account had been compromised, the Bitcoin futures market saw up to $1 billion in open interest obliterated.
Interestingly, the reaction of Ether (ETH) to the erroneous ETF approval information greatly benefited those investors not liquidated during the incident. While some experts predict a rise in Bitcoin's value into the $50,000 threshold, BTC has delivered over double the returns of gold in 2023, a momentum that has carried forward into 2024. Despite Bitcoin's growth, the SEC continues to issue cautionary statements on crypto investments, even as a approval appears likely.
If spot Bitcoin ETFs gain approval, predictions estimate that it could generate about $600 billion in fresh demand. Furthermore, CryptoQuant analysts suggest that such approval could raise Bitcoin's market capitalization by as much as $1 trillion. Some traditional banks, like Standard Chartered, predict Bitcoin prices could reach $200,000 per unit by the end of 2025.
Crypto investments from institutional investors dominated in 2023, with Bitcoin specifically receiving over $1.93 billion of the $2.25 billion pushed into crypto assets. Meanwhile, retail investor interest in Bitcoin has also been on the rise as the number of Bitcoin wallets holding non-zero amounts reached a historic high on 2nd January. Further, due to consistent month-on-month price growth, Bitcoin's realized cap increased, reinforcing a generally bullish sentiment towards the cryptocurrency.
The information provided here is not investment advice or recommendations. Every investment and trading action involves risk, and readers should perform their own research before making a decision.
Published At
1/10/2024 1:59:23 AM
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