Bitcoin saw a sharp drop to roughly $45,000 before recovering from losses following a misleading post on the US Securities and Exchange Commission’s compromised X account. The fake announcement claimed the agency had given the green light for ETFs linked to the digital asset.
The SEC swiftly clarified that no approval had been granted for spot-Bitcoin exchange-traded funds, acknowledging the compromise of the X account in a cybersecurity incident. Market participants were caught off guard by Tuesday’s events. Analysts widely anticipate the SEC to make a decision on the ETF applications in the US by Wednesday.
By 7:20 a.m. in London on Wednesday, Bitcoin was trading around $45,900, after surging to over $47,000 on Tuesday amid growing optimism for ETF approvals.
Ophelia Snyder, president of 21Shares seeking to offer a Bitcoin ETF with ARK, remains confident, saying the incident won’t hinder the process, given the lengthy effort put into it.
The pending SEC decision on the ARK 21 Shares application is due by the end of Wednesday. Experts foresee approval for multiple applications after last-minute adjustments.
SEC Chair Gary Gensler’s skepticism toward crypto’s integrity contrasts with the industry’s push for ETFs, especially after the SEC’s legal setback against Grayscale Investments. This conflict centered on Grayscale’s desire to convert its $29 billion Bitcoin Trust into an ETF.
Bitcoin’s recent surge, 163% over a year, reflects anticipation for ETFs, yet some analysts foresee a potential sell-off once SEC approval arrives as speculators aim to secure profits.
The temporary Bitcoin surge to almost $48,000 following the false SEC post highlights the market’s sensitivity. Analysts like Tony Sycamore from IG Australia Pty suggest a potential rally to $51,000 post-ETF approval before an anticipated pullback.
