- Bitcoin experienced a tumultuous ride, surging to $47.9K following a false SEC tweet about ETF approval, only to plummet to $45.1K when the misinformation was debunked, causing over $50M in liquidations.
- The incident marked the second social media-induced crypto rollercoaster of the day, prompting caution among investors and speculation about the impact of genuine approval news.
Bitcoin (BTC) embarked on a rollercoaster ride during Tuesday’s trading session, experiencing a surge and subsequent plunge as a result of a false announcement on the U.S. Securities and Exchange Commission (SEC) social media account. The misleading post claimed the approval of spot bitcoin exchange-traded funds (ETF), sending shockwaves through the cryptocurrency market.
In a matter of minutes, BTC soared 2.5% to reach a fresh 19-month high of $47,900, with crypto enthusiasts celebrating the apparent breakthrough. The official SEC account’s post on X (formerly Twitter) fueled excitement, drawing massive attention as investors anticipated the long-awaited approval of a bitcoin ETF.
However, the jubilation was short-lived. Bitcoin’s value sharply nosedived by nearly 6% to as low as $45,100 when it was revealed that the SEC’s social media account had been compromised. SEC Chair Gary Gensler swiftly denied the news, exposing the false nature of the announcement and leaving market participants bewildered.
The aftermath of this crypto rollercoaster was felt in the derivatives market, where over $50 million worth of trading positions were liquidated within the hour, according to CoinGlass data. Liquidations occur when exchanges forcefully close traders’ open positions due to a loss of margin, a consequence of the sudden and severe price fluctuations.
This incident marked the second time on that fateful Tuesday that false social media information triggered massive volatility in the cryptocurrency space. Earlier in the day, dogecoin (DOGE) experienced a 9% jump following an X post about the death of the token’s mascot, only to plummet when the news was confirmed to be inaccurate.
As the dust settled, BTC was trading slightly below $46,000 at press time, reflecting a 2% decline over the past 24 hours. Alex Krüger, co-founder of Asgard Markets, offered insights, suggesting that the day’s events hinted at the possibility that bitcoin might not experience as significant a rally as bulls hope when the authentic news about an approval eventually arrives.
In the fast-paced world of cryptocurrencies, where misinformation can trigger substantial market movements, investors are reminded of the need for caution and vigilance in interpreting news and social media posts to navigate the volatile landscape successfully.
