Crypto Market Rollercoaster: Bitcoin Jumps, Then Slumps After ‘Compromised’ SEC X Account Tweets Fake ETF Approval

On Tuesday, the price of Bitcoin spiked to a new 19-month high of $47,900 after apparent news of the much-awaited Bitcoin exchange-traded fund (ETF) approval decision.

BTC then fell sharply to $45,000 after U.S. Securities and Exchange Commission Chair Gary Gensler tweeted that no prospective Bitcoin ETF applications have actually been given the green light.

Fake SEC Post Swings Bitcoin Price

A single fake post on X has sparked widespread ruckus in the crypto market.

Bitcoin jumped from a price of around $46,600 to nearly $48,000 in a matter of minutes on Jan. 9, marking a 2-year high for the alpha cryptocurrency.

This was after the SEC’s official X account posted a tweet claiming that the regulator had approved spot Bitcoin exchange-traded funds for the first time in history, attracting a lot of attention with crypto watchers prematurely celebrating the game-changing decision. The post included a photo with a quote purportedly from SEC boss Gary Gensler.

Approximately 15 minutes later, Gensler corrected the phony record, indicating that his agency “has not approved the listing and trading of spot bitcoin exchange-traded products.”

Then, the price of Bitcoin dipped to as low as $45,150, when it turned out the SEC’s X account had been compromised. While the fake tweet was promptly deleted, the SEC drama reverberated throughout the rest of the day, leaving crypto community members bewildered and disappointed.

Nonetheless, some securities lawyers and lawmakers called for the SEC — which often dismisses cryptocurrencies as a too-easily-manipulated market — would have to investigate itself. Other commentators questioned how the top financial cop could protect trillion-dollar markets if it couldn’t even safeguard its social media account. 

Will Spot ETFs Be Delayed After SEC Hack Incident?

The SEC’s OK’ing of one or all of the 13 pending spot Bitcoin exchange-traded fund (ETF) applications is still expected this week, with prominent Bloomberg analysts placing approval odds at 90%.

While some worry Tuesday’s charade could be used as an excuse to delay the SEC’s decision beyond the anticipated deadline today, Bloomberg’s Eric Balchunas said he’s still anticipating official approval of the spot Bitcoin ETFs on Wednesday afternoon and trading to commence Jan.11.

Anthony Tu-Sekine, a partner at law firm Seward & Kissel LLP, told Reuters that he didn’t think Tuesday’s fake ETF news would change the possibility of a regulatory nod from the SEC at this late stage. Tu-Sekine, however, wondered why an individual would do such a thing when the approval was already widely envisioned. “This is really puzzling,” he reportedly opined.