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Bitcoin declines after false ETF approval
Bitcoin fell on Tuesday after the Securities and Exchange Commission's social media account — which was hacked — sent a false social media post stating that the regulator had approved a long-awaited bitcoin exchange-traded fund. Immediately after the first post, the world's largest cryptocurrency jumped to its highest level of $47,901 since March 2022, but later traded down 3%.
Markets are falling
Wall Street's benchmark S&P 500 index ended with slight declines on Tuesday, closing down 0.15%, while the Dow Jones Industrial Average fell 0.42%. However, the Nasdaq Composite rose 0.09% at the close as it rebounded from a 0.9% decline earlier in the session. Technology stocks continued to rise and avoided deeper declines. Asian stocks bucked the trend, with Japan's Nikkei 225 surpassing a 33-year high after jumping more than 2%, with health technology and consumer services stocks rising.
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Bitcoin is arguably the most popular cryptocurrency in the world, and it has made significant gains in the past year. Most of it was driven by hype around a Bitcoin exchange-traded fund that led to a nearly 60% jump in the cryptocurrency over the past three months.
A false social media post about such an ETF being approved by the SEC was the last thing the crypto enthusiasts were hoping for.
Market participants were expecting an update from the regulator on Wednesday, which would set the SEC's deadline to approve or deny the application.
But Bitcoin sold off quickly after the SEC said its X account had been hacked, confirming that it had not approved the Ark 21 Shares Spot Bitcoin ETF, among other things.
In the early hours of Asia, social media company X said it had completed a preliminary investigation into the hacked account for the SEC, indicating that it was not due to any breach of “
“The sell-off shows a turbulent market,” said Michael Renko, research analyst at Delphi Digital. “This type of high-volume rebound event may have spooked some people and put people off some risk, but the initial market reaction is encouraging.”
However, it is still widely expected to be approved by the SEC, but some investors believe that given Bitcoin's dizzying rise, it could also mean that the first-day impact of approval could turn into just a selling news event.
