LONDON/WASHINGTON, Oct 16 (Reuters) - In what was a whirlwind day for the crypto market, Bitcoin surged to its highest point since August, only to witness a sharp drop, following the clarification from BlackRock about their yet-to-be approved crypto investment product by the U.S. regulators.
Early in the day, Bitcoin's price had spiked by a staggering 10%, reaching $29,900. However, the high was short-lived as the coin settled at $28,211, marking a 3.82% increment, highlighting its characteristic volatility.
The surge was attributed to a report by Coin Telegraph, a renowned crypto news platform. They prematurely announced that the U.S. Securities and Exchange Commission (SEC) had given a green light to BlackRock's application for a spot bitcoin exchange-traded fund (ETF). But the tables turned when Fox Business unveiled BlackRock's denial of such claims on social media platform X.
The immediate clarification came from BlackRock to Reuters, stating, "The iShares Bitcoin ETP application is still under review by the SEC." This was further corroborated by insiders from SEC confirming the application’s pending status.
Ben Laidler, the global markets strategist at eToro, commented on the day's events, saying, "Crypto markets have just shown how sensitive they are to any potential good news, with their premature rally today on rumors of the approval of a spot bitcoin ETF."
Following the frenzy, Coin Telegraph took to X to apologize for its previous announcement, admitting to the spread of "inaccurate information." They affirmed their commitment to transparency and disclosed an ongoing internal investigation, the results of which would be shared publicly within the next 3 hours. The initial misleading post was subsequently removed.
The crypto community has been on edge, eagerly anticipating the SEC's decision on the pending spot bitcoin ETF applications. If approved, these ETFs have the potential to significantly boost investment in the cryptocurrency sector. However, the SEC has consistently denied all applications for spot bitcoin ETFs, citing concerns over the inability of the applicants to safeguard investors from potential market manipulations.
Joseph Edwards, the research head at London-based crypto firm Enigma Securities, remarked, "The move does show how monomaniacally obsessed the bitcoin market is with the coming spot ETFs."
Lucas Kiely, the chief investment officer at Yield App, also weighed in on the matter, noting that while the day's news turned out to be a "false alarm," it served as a "good dress rehearsal" for the eventual decision by the regulator. "Headline risk is creating a lot of volatility ahead of this SEC announcement, with everyone trying to get ahead of it as the market will move markedly either way depending on the decision," Kiely added.
On a related note, on Oct. 13, Reuters had been the first to disclose that the SEC would not be contesting the recent court decision, which deemed its rejection of Grayscale Investments' spot bitcoin ETF application as inappropriate. This decision, which is under the limelight in the cryptocurrency domain, will see the District of Columbia Court of Appeals in Washington detail the next steps within the week. This is likely to include directives for the SEC to reconsider Grayscale's application.
The intricate dynamics of this developing story were extensively covered by journalists Tom Wilson and Elizabeth Howcroft from London and Hannah Lang from Washington, with additional insights provided by Suzanne McGee. The editing team comprised of Tommy Reggiori Wilkes, Sharon Singleton, and Josie Kao, ensuring accurate and comprehensive reporting of the events.
