The market reacted with a sell-the-news response following the false news of a spot Bitcoin BTC exchange-traded fund (ETF) approval on January 9. The United States Securities and Exchange Commission’s (SEC) official X account, formerly known as Twitter, was hacked and published a fake news post stating that the regulator had granted multiple Bitcoin ETF approvals for listing on registered exchanges. SEC chair Gary Gensler clarified on X that the SEC account was compromised and that the agency has not approved any spot Bitcoin ETF products.
K33 Research analyst Vetle Lunde noted that the fake news on ETF approval provided a glimpse into how the market could potentially react to actual approval news. Lunde wrote on X, “The market showed its hands yesterday; the ETF approval rehearsal favors a sell-the-news reaction.” He pointed out that very few viewed the SEC’s approval announcement with suspicion in the first 14 minutes after publication.
Following the announcement, longs quickly crowded the market, causing a whipsaw in the subsequent minutes. BTC was headed lower; the SEC ‘stepped in’ and formed a bottom after confirming the hack. Lunde observed BTC surging to as high as $47,870 in four minutes after the fake approval tweet, only to face a sharp drop to $46,000 in the next 10 minutes.
Some industry executives had previously predicted that the market would likely react to ETF approval news by selling in the short term. Cathie Wood, founder, CEO, and chief investment officer of potential Bitcoin ETF issuer ARK Invest, expects some investors to sell on the news of ETF approval due to a major anticipatory move around this market event. Wood suggested in late 2023 that the SEC would give the spot Bitcoin ETF the green light for institutional investors to participate, emphasizing that the long-term reaction is promising and more important.
Some analysts and traders believe that potential Bitcoin ETF approval will unlikely trigger any subsequent positive market moves. Analysts from QCP Capital stated that the potential ETF approval is “mostly priced in, and there may not be a huge rally post the approval.” They noted that the initial reaction to the ‘approval’ was muted with BTC being unable to trade out of the resistance area. One trader expressed confidence that similar price action would occur today, with the community widely anticipating the SEC to approve multiple Bitcoin ETFs on January 10.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Gary Gensler, Cathie Wood, Vetle Lunde |
| Companies | ARK Invest, QCP Capital, United States Securities and Exchange Commission, K33 Research |
| Currencies | Bitcoin |
| Securities | None |
