Misinformation About BlackRock ETF Approval Sparks Bitcoin Surge, Causing Ripples in Crypto Markets

Amid a busy Monday, cryptocurrency news outlet Cointelegraph reported that the U.S. Securities and Exchange Commission (SEC) had supposedly approved of BlackRock’s Ishares spot Bitcoin exchange-traded fund (ETF). 

The unconfirmed information rapidly circulated, resulting in a more than 10% surge in BTC’s value against the U.S. dollar, despite the absence of official confirmation from either the SEC or BlackRock.

Within the volatile realm of cryptocurrencies, a spurious report triggered a substantial market upturn. The misleading information suggested that BlackRock’s spot Bitcoin ETF had been granted approval, causing Bitcoin’s price to surge from $27,700 per coin to a substantial $30,000 odd after Cointelegraph’s widely shared social media post on X (formerly Twitter).

However, the news was completely baseless. Fox News correspondent Eleanor Terrett uncovered that BlackRock had confirmed the news to be “false,” clarifying that the ETF application remained under review.

🚨BlackRock has just confirmed to me that this is false. Their application is still under review. https://t.co/XIfIWZ0Ule

— Eleanor Terrett (@EleanorTerrett) October 16, 2023

BlackRock reiterated the falseness of the information when speaking to The Block, emphasising that the ETF application was still awaiting approval from the securities regulator. Bloomberg’s ETF specialist, James Seyffart, labelled Cointelegraph’s widely shared social media post as “misinformation,” underscoring his inability to locate any corroborating details.

Following the exposure of the false news, Cointelegraph issued a public update, expressing their regrets. The news outlet stated, “We apologise for a tweet that led to the dissemination of inaccurate information regarding the Blackrock Bitcoin ETF.” They went on to mention that an internal inquiry is presently in progress, emphasising their dedication to transparency. The company further pledged to disclose the investigation’s results to the public once it concludes, with an estimated timeframe of within three hours.

That three hours is up, and they have released their findings. 

Per the CoinTelegraph article:

“Earlier today, during routine coverage, Cointelegraph’s social media team posted a message on X without prior editorial approval stating that the United States Securities and Exchange Commission had approved BlackRock’s iShares spot Bitcoin exchange-traded fund, or ETF. This was false, the result of misinformation. The news lead originated from an unconfirmed screenshot posted by an X user who claimed it was from the Bloomberg Terminal.

Cointelegraph did not ultimately publish an article with this incorrect information, but we deeply regret posting this in error on X and the impact it has caused. An internal investigation revealed that our standard procedure for posting breaking news on social media, wherein sources are required to be verified before posting to social media, was not followed.”

You can read how it all unfolded in the link above.

What an interesting turn of events.

This situation arises amid heightened expectations for the imminent availability of a spot-Bitcoin ETF for American investors. For nearly a decade, issuers have strived to launch a US spot-Bitcoin ETF, facing obstacles like regulatory concerns about market manipulation and scams.

Nevertheless, companies persist in their efforts to access potential inflows that could eventually amount to billions of dollars. Multiple issuers have worked on applications and strategies to satisfy regulators, with more than ten pending spot Bitcoin ETF applications. With industry giants like BlackRock, Invesco, and Fidelity competing, analysts believe the odds of approval are higher.

Monday’s frenzy also underscores that the market has not yet factored in the potential approval, evident in Bitcoin’s swift 10% surge. The crypto market remains susceptible to false starts because it hinges on expanding crypto access to a broader investor base, as noted by Todd Sohn, ETF and technical strategist at Strategas Securities.

“Bitcoin is still flat since March, so I’d guess it’s not fully priced in,” said Sohn. “If a fake headline was worth 6-10%, the real deal should equate to more.”

Roxanna Islam, Associate Director of Research at VettaFi, concurred, saying, “We’ll see a stronger, more sustained rally once spot-Bitcoin ETFs are actually approved,” she said. “This morning’s move was based on very uncertain news that was disproven soon after its release, so the market did not have adequate time to react.”