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(Kitco News) – Cryptocurrency prices surged higher in early trading on Monday after a post from Cointelegraph indicated that the iShares Bitcoin (BTC) exchange-traded fund (ETF) application by BlackRock was approved by the Securities and Exchange Commission (SEC), sending crypto traders scrambling to acquire BTC ahead of the crowd.
But the sudden spike in momentum was short-lived, as BlackRock made an official statement in response to the rumor, saying that its application for a spot Bitcoin ETF is still under review by the SEC. A BlackRock spokesperson has since confirmed with Kitco Crypto that the iShares Bitcoin application is still under review.
Shortly after the post from Cointelegraph began circulating, Bloomberg Intelligence ETF analyst James Seyffart suggested it was incorrect.
“I believe this to be fake news,” he tweeted. “While this would be positive for the things we’ve been saying. I can’t find anything that would confirm this at the moment.”
As for how the false rumor started in the first place, Bloomberg Intelligence senior ETF analyst Eric Balchunas suggested it was possibly tied to the SEC’s decision to not appeal the ruling that the regulator needs to review Grayscale’s application to convert the Grayscale Bitcoin Trust (GBTC) into an ETF.
“I just wonder if this is the news from Friday that Reuters broke that was SEC not going to appeal Grayscale being converted into approval news,” Balchunas said.
On Friday, the SEC said it would not be seeking to appeal the Grayscale ruling.
“The Federal Rules of Appellate Procedure’s 45-day period to seek rehearing has now passed,” a Grayscale spokesperson said. “The Court will now issue its final mandate within seven calendar days. The Grayscale team remains operationally ready to convert GBTC to an ETF upon the SEC’s approval, and we look forward to sharing more information as soon as practicable.”
When asked if this means GBTC would be converted to an ETF after seven days, Balchunas said, “As far as I know, the court is not going to tell the SEC to convert grayscale ETF, and moreover the court’s statement [is probably] not going to change anything at all.”
The incorrect X (formerly Twitter) post by Cointelegraph quickly amassed more than half a million views as news of the potential approval spread, resulting in Bitcoin’s price rallying to $30,000 on some exchanges, its highest price since August 9.
BTC/USD Chart by TradingView
Cointelegraph has since deleted the post and released a statement clarifying the incident. “We apologize for a tweet that led to the dissemination of inaccurate information regarding the Blackrock Bitcoin ETF,” Cointelegraph said. “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 concluded within 3 hours.”
Data provided by Coinglass shows that futures traders were hit hard by the sudden surge in price, with more than $78.88 million worth of BTC short positions being liquidated in the past couple of hours.
BTC total liquidations chart. Source: Coinglass
An additional $45 million in BTC long-positions were also liquidated, bringing the total 24-hour liquidations across all crypto assets to $182.38 million.
At the time of writing, Bitcoin is trading at $28,101, an increase of 4.41% on the 24-hour chart.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
