False news shook the crypto world on October 16, 2023. Cointelegraph, a news platform, claimed that Blackrock’s Ishares spot bitcoin exchange-traded fund (ETF) had gained approval from the U.S. Securities and Exchange Commission (SEC). This purported approval would enable investors to buy and sell bitcoin directly on the stock market.
The news spread rapidly on social media, leading to a surge in Bitcoin’s price. Within minutes, its value soared from $27,700 to $29,900. Many enthusiasts of cryptocurrency celebrated this development as they believed it signaled an important milestone in the adoption and legitimacy of bitcoin.
The Truth Bhind The Fake ETF News
However, the joy was short-lived, as it soon became clear that the news was fake. Fox News reporter Eleanor Terrett contacted Blackrock and confirmed that the news was “false” and that the ETF application was still under review. Blackrock also told The Block that the ETF approval was still pending and that they had no idea where the false report came from.
Bloomberg ETF expert James Seyffart debunked the fake news, saying he could not find any official announcement or document from the SEC or Blackrock. He called Cointelegraph’s post “fake news” and warned people not to trust unverified sources.
Cointelegraph later deleted the post on X and edited the post on Telegram, adding the word “reportedly” to the statement. The Telegram post was also removed eventually. Cointelegraph apologized for the mistake and said that they were conducting an internal investigation.
The Impact Of The Fake ETF News On The Crypto Market
The impact of fake news on the crypto market was significant, causing volatility and confusion. Initially, Bitcoin’s price surged to nearly $30K, but dropped below $28K once the truth emerged. Other cryptocurrencies mirrored Bitcoin’s movements as they often do. The dissemination of false information also stirred speculation about how the approval of a legitimate ETF would affect the market.
Numerous analysts regard a bitcoin ETF as a game-changer for the crypto industry. They believe it would attract institutional and retail investors, enhance liquidity and transparency, while reducing barriers to entry. However, some argue that introducing a bitcoin ETF could bring forth more regulation and risk, questioning its ability to reflect Bitcoin’s true value.
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Despite receiving numerous applications over the years, the SEC has yet to approve any bitcoin ETFs due to concerns surrounding market manipulation, fraud, custody issues, liquidity problems, and investor protection in relation to cryptocurrency assets. The SEC now faces a deadline of November 14th to decide on Blackrock’s ETF application.
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