On Monday, a news outlet incorrectly reported that the SEC had approved BlackRock’s Bitcoin ETF, causing Bitcoin’s price to surge by over 10%.
However, BlackRock soon clarified that their ETF application was still under SEC review. The market reacted swiftly, causing a $65 million loss in investments in just minutes.
After the news, Bitcoin broke the $30,000 mark for the first time in weeks. However, it later stabilized at a lower but still increased price, showing a nearly 6% gain in 24 hours.
Meanwhile, a true story also influenced the market. The SEC missed a deadline to challenge a favorable decision for Grayscale, another crypto company.
Grayscale plans to convert its crypto fund into a Bitcoin ETF.
Unfortunately, some investors suffered big losses. One investor bought Bitcoin for $613,000 but had to sell for $536,000, losing $49,000 in just 10 minutes.
The news outlet later apologized for spreading the false information. They also announced an internal investigation.
This rush to be the first to report is a common issue across all news sectors.
Background
To understand this event, let’s look at the history of Bitcoin and ETFs. Bitcoin is a digital currency created in 2009.
An ETF, or Exchange-Traded Fund, is like a stock but it tracks an asset or a group of assets.
The SEC, the U.S. Securities and Exchange Commission, has been cautious about approving Bitcoin ETFs.
This caution exists due to the market’s volatility and potential for manipulation.
A Bitcoin ETF approval would be a big deal. It would make it easier for regular people to invest in Bitcoin.
This is why the false news had such a big impact. It stirred hope for easier, safer ways to invest in Bitcoin.
Therefore, accurate reporting in this space is crucial to prevent large-scale losses and to maintain investor trust.