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Bitcoin Soars and Crashes on Misinformation

Bitcoin has recently experienced a turbulent period, going from $27,900 to $30,000 within a few minutes, only to quickly plummet following the dissemination of fake news about the approval of a spot ETF. This series of events caused confusion in the cryptocurrency market and led to nearly $100 million in liquidations in just one hour.

Deceptive News Causes Bitcoin to Soar and Crash

The story starts on social media, specifically on the platform formerly known as Twitter. A deceptive post suddenly claims that the United States Securities and Exchange Commission (SEC) has given the green light to a Bitcoin spot ETF. Although this post was taken down after only thirty minutes, it managed to generate enough interest to significantly impact the Bitcoin price.

In the midst of the excitement, Bitcoin briefly surpassed the $30,000 mark, causing excitement among traders and investors. However, this optimism did not last long, as analysts and journalists began expressing their doubts about the authenticity of this news. Renowned asset management firm BlackRock promptly confirmed that the information was false.

Following BlackRock’s denial, Bitcoin underwent a rapid correction, falling back to $28,000. According to CoinGlass data, this volatility caused $81 million worth of short positions and $31 million worth of long positions to be liquidated.

Liquidations Increase as Misinformation Spreads

Liquidation, a process where an exchange automatically closes a leveraged trader’s position in the event of partial or total loss of the initial margin, has become commonplace. This occurs when a trader is unable to meet the required margin requirements to maintain an open leveraged position.

It is important to note that the official SEC website does not display any approval of a Bitcoin spot ETF, as confirmed by reliable financial information source Bloomberg. According to Bloomberg, the approval request for a Bitcoin spot ETF by BlackRock is still under review.

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