Last night, a small drama unfolded in the crypto markets: it all started with a tweet on the official X profile of the SEC announcing the final approval of Bitcoin spot ETFs.
Summary
The Bitcoin price boom after the false news of SEC approval of ETFs
As soon as the tweet was published, the price of Bitcoin immediately jumped from $46,700 to $47,900, reaching a new annual high for 2024.
But it was immediately clear that something was wrong, because that tweet appeared decidedly strange.
First of all, it referred generically to Bitcoin ETFs, while in reality the approval specifically concerns ten requests made by ten different funds. The SEC will have to individually pronounce on each of them, and not generically on Bitcoin ETFs.
Furthermore, there are already ETFs on Bitcoin in the US market, but they are collateralized in futures contracts. So, the novelty of the approved ETFs is that they are collateralized in BTC, or spot Bitcoin, but there was no mention of this important detail in the tweet.
Moreover, the tweet also used the hashtag of Bitcoin with the logo, which is very unusual for a government agency like the SEC.
In fact, within a few minutes it was understood that it was a fake tweet, and the price of BTC returned to $46,700 just over five minutes later.
Later it continued to drop to $45,000, then slightly rise around $46,000.
SEC: the true approval of Bitcoin spot ETFs
The real approval should instead come tonight.
Based on what happened last night, it is possible to imagine that the publication of the true news will not give rise to a sell the news, but perhaps to another increase in the price of BTC.
Moreover, there are many who claim that during this period Bitcoin seems to have the potential to rise up to $50,000.
The fact is that as early as tomorrow these new ETFs on Bitcoin spot could land on US exchanges, and if they were to achieve immediate success, it could drive up the price of BTC to levels higher than the current ones.
It is therefore possible that the sell the news may occur with a delayed burst, perhaps starting from the weekend when the stock markets will be closed.
Yesterday’s incident should not at all prejudice today’s approval, and indeed puts the SEC in an even more uncomfortable position.
The SEC’s embarrassment
In October, SEC Chairman Gary Gensler had published a tweet recommending to enable multi-factor authentication.
Yesterday it was discovered that the SEC’s X profile was violated precisely because they had not activated two-factor authentication.
Gensler’s comment was brief: “the SEC’s Twitter account has been compromised and an unauthorized tweet has been published”.
Note that this statement contains an obvious error, as Twitter has actually ceased to exist since it was renamed X.
In fact, the counterpart tweet on the SEC’s X profile does not report this error.
The risk of dismissal
For several months now, there has been a discussion in the US Congress about removing Gary Gensler from the presidency of the SEC. Read more.
During his tenure, the agency lost two lawsuits against two crypto companies.
The first is the one lost against XRP. The SEC led by Gensler had argued that XRP should be considered an unregistered security, but the court ruled against them.
The second is the one lost against Grayscale, and the one that gave the green light to the approval of Bitcoin spot ETFs.
The SEC, in fact, had rejected Grayscale’s request to transform its Bitcoin Trust into a real ETF. Grayscale then sued the SEC, and the court ruled in its favor, discrediting the SEC’s decision.
It can be said that the SEC’s anti-crypto policy led by Gensler has been a colossal failure, also due to the failure of the regulated exchange FTX that the SEC couldn’t even imagine.
After yesterday’s embarrassment, an increase in requests for Gensler’s removal from the presidency of the US government agency that oversees financial markets is to be expected.
After the probable approval tonight of the ETFs on Bitcoin spot, in case of immediate success on the markets tomorrow, Gensler’s position would become even more shaky.
