The official Securities and Exchange Commission account on X, formerly known as Twitter, shared a post falsely claiming approval of spot Bitcoin exchange-traded funds (ETFs).
Bitcoin Soars, Crashes: Market’s Rollercoaster
This sent shockwaves through the market, propelling Bitcoin 3% towards a 20-month peak of $47,900. Euphoria bubbled over, with countless investors prematurely rejoicing what appeared to be a landmark decision.
However, the jubilation was tragically short-lived. The fabricated news quickly unraveled, leaving an armada of investors bewildered and disappointed.Screenshot by Emma Roth / The Verge
As the truth torpedoed the market’s optimism, Bitcoin plummeted back to earth, leaving in its wake a cloud of uncertainty and lingering questions about the SEC’s stance on digital assets.
This episode casts a spotlight on the delicate dance between social media, misinformation, and volatile markets. It reinforces the crucial need for rigorous fact-checking and cautious interpretation, especially in the fast-paced realm of cryptocurrency.
Following the events, the aftermath saw a substantial total of over $210 million in liquidations. This included $135 million resulting from the closure of long positions and an additional $67 million from short positions being liquidated.
The significant impact on both long and short positions indicates the widespread repercussions of the market turbulence, as investors faced losses on multiple fronts.
We can confirm that the account @SECGov was compromised and we have completed a preliminary investigation. Based on our investigation, the compromise was not due to any breach of X’s systems, but rather due to an unidentified individual obtaining control over a phone number…
— Safety (@Safety) January 10, 2024
SEC Breach Sparks Outcry, ETF Uncertainty
Security experts are scratching their heads at how the SEC’s supposedly secure account was breached. Legal eagles, however, are sharpening their talons, pointing fingers at the SEC itself for the subsequent market chaos.
“The SEC will have to investigate itself for market manipulation,” a group of securities lawyers declared, their tone a mix of disbelief and grim determination.
Adding fuel to the fire, Senator Bill Hagerty demanded answers from the agency, echoing calls for accountability across the industry. Even Ripple CEO Brad Garlinghouse joined the chorus, adding his voice to the growing pressure for self-investigation.
Days like this remind me that 1/ the SEC should be investigating itself for multiple things 2/ crypto Twitter remains undefeated in memes.
— Brad Garlinghouse (@bgarlinghouse) January 9, 2024
But amidst the outrage, a question lingers: will the SEC finally give the green light to a Bitcoin ETF? After years of waiting, industry insiders point to the agency’s inconsistent stance as a potential roadblock.
Charles Gasparino, a financial pundit, summed it up: “For the SEC not to approve tomorrow would be unprecedented.”Total crypto market cap at $1.668 trillion on the daily chart: TradingView.com
This saga is far from over. The next chapter could see regulatory reforms, legal battles, and a major rethink of how the SEC interacts with the ever-evolving world of cryptocurrency.
The $210 million meltdown triggered by the fake tweet serves as a stark reminder of the fragility of the crypto market and the need for robust security measures.
While accusations of manipulation swirl, regulatory scrutiny is intensifying, leaving the question of the SEC’s future role in overseeing digital assets hanging in the balance.
One thing’s for sure: the watchdog has its own leash to tighten, and the public is watching with a hungry eye.
Featured image from Shutterstock