Thanks to a fake tweet from the U.S. Securities and Exchange Commission (SEC) account related to Bitcoin ETFs managed to trigger an unexpected reaction in market prices
From the official account of the SEC on X, a tweet was disseminated reporting the acceptance of Bitcoin exchange-traded funds, which evidently had a direct effect on the quotations of the main cryptocurrencies on the market.
A false post from the regulator’s official account led to increased cryptocurrency valuations, pending an official decision.
In essence, this mechanism could completely change the dynamics of the market, since its objective is to increase the possibilities for the arrival of institutional investment. The announcement left more than one surprised.
The downside is that the notice was erroneous. The post stated, “Today the SEC approves Bitcoin ETFs for listing on all national exchanges.” It was accompanied by the subsequent message, “They will be subject to oversight and enforcement measures to ensure consumer protection.” In addition to the information, a photo of SEC Chairman Gary Gensler was included.
Cryptocurrency prices rose following the post and fell once it was debunked. Following the release, it had a direct impact on Bitcoin prices, extending to the level that at the time Bitcoin was trading at $46,700, and in five minutes it was already trading at $48,700.
The publication caused the price to rise and then plummet.
After 15 minutes, it was announced from the account that it had been hacked and that, therefore, the SEC “has not approved the listing or marketing of Bitcoin spot ETF products.” This caused the market to fall and the price of Bitcoin to lose value, trading down to $45,466 at the time of the report.
According to information provided by X, formerly known as Twitter, the confusion occurred because someone obtained the phone number associated with the account and was able to make the post.
SEC has warned of crypto fraud
It is important to remember that the SEC chairman has previously mentioned that the crypto market is marked by misconduct and fraudulent activities. The agency has tightened its measures in the industries after the collapse of FTX.
This week is vital, as the regulatory body’s decision regarding the ETFs registered by Ark Investments and 21Shares will be announced.
A relevant fact is that Bitcoin was the asset with the best performance throughout 2023.
ETFs approval would be a significant advantage for the market
In the event of approval, this would represent a substantial advantage for the market. An ETFs would provide much more security for investment and open the door for large investors. If large investors enter the market, this would imply a higher demand and boost valuations.
Conclusion: The Impact of Misinformation on Cryptocurrency Markets
The incident of a fake SEC tweet underscores the fragile balance of trust and information in the cryptocurrency market. While the prospect of Bitcoin ETFs holds promise for institutional investment and market stability, it also reveals the vulnerabilities to misinformation. This event serves as a reminder of the need for stringent security measures and informed regulatory oversight to protect investors and maintain market integrity.
