Bitcoin pumped from under $28,000 to $30,000 within minutes earlier on Monday as unverified rumors that the US Securities and Exchange Commission (SEC) had approved asset management giant BlackRock’s iShares spot Bitcoin Exchange Traded Fund (ETF) application began circulating across social media.
In a now-deleted tweet, Cointelegraph’s Twitter account first reported the news. They then posted the same tweet again but added the word “reportedly” before also deleting that.
The veracity of the rumors was immediately questioned, with Twitter users asking for the source.
According to Bloomberg reporter Emily Graffeo, BlackRock said on Monday that its ETF application is still under review.
As market participants realized the lack of credibility behind the rumors of iShares spot Bitcoin ETF approval, shorts piled in and sent the Bitcoin price quickly back to the $28,000 level.
That marked a price swing of as much as 7.5% higher and then lower again in a matter of minutes.
The Bitcoin market’s outsized moves based on social media rumors emphasize how sensitive the cryptocurrency is to the theme of spot ETF applications right now.
Dozens of major financial institutions, including BlackRock, Vanguard and Fidelity, applied to create their own spot Bitcoin ETFs back in June.
Meanwhile, at the end of last week, the SEC decided not to appeal a legal loss it sustained in a lawsuit with Grayscale over the manner in which it shot down the digital asset manager’s latest spot Bitcoin ETF application.
This bolstered hopes the agency is readying itself for spot Bitcoin ETF approvals.
When Will the SEC Approve Spot Bitcoin ETFs?
The SEC has rejected dozens of applications for spot Bitcoin ETF approvals in recent years, including those submitted by Grayscale and ARK Invest.
The agency has been skeptical of the lack of regulation and potential for manipulation in the Bitcoin spot markets, from which the ETF price would be derived.
But momentum has shifted drastically in recent months.
Wall Street behemoths like BlackRock hardly ever file an application for an ETF unless they are confident it will get approval.
Indeed, the latest round of spot Bitcoin ETF applications came packaged with so-called surveillance sharing agreements that hand the SEC closer monitoring powers over the Bitcoin spot markets in the U.S.
Given also the hefty influence that firms like BlackRock wield over U.S. regulators, analysts now deem spot Bitcoin ETF approvals as highly likely in the coming quarters.
As per a tweet by crypto analyst Jelle, October the 16th, 17th and 19th are notable second deadlines for the SEC to approve various spot Bitcoin ETF applications that came in back in June.
But the agency tends to kick the can down the road until the final deadlines, which are in mid-March 2024.