Bitcoin ETF enthusiasts were hit by fake news that led to $85 million in liquidated

Oct 17
A faulty news article that caused a temporary 10% rise in Bitcoin sheds insight into the cryptocurrency market, which is anxiously awaiting the emergence of mainstream ETFs to turn things around.

On Monday morning, a news report that stated BlackRock Inc. had been given the go-ahead to start an exchange-traded fund for spot cryptocurrencies swiftly reversed the token's upward trend.
The money on the line was extremely real, even though the news was untrue. According to Coinglass tracker data, almost $85 million worth of trading positions were liquidated the previous day, primarily by traders who were banking on falling prices.

The story fuels a fierce discussion over whether the market has accurately priced in the creation of an exchange-traded fund tracking the largest digital coin, even if disinformation is widespread in a sector favored by scammers and digital natives alike.

It also highlights regulators' worries that small-time investors lack fundamental safeguards in the uncharted territory of cryptocurrencies, a roadblock that has in the past spurred the Securities and Exchange Commission's reluctance to broaden market access.

According to Michael O'Rourke, chief market strategist at JonesTrading, "the fake news about the Bitcoin ETF approval highlights the difficulty of protecting investors in an unregulated space that attracts shady operators and rampant speculation."

"Monday's frenzy also shows that, given Bitcoin's quick 10% surge, any prospective permission has not yet been priced into the market. As more investors become interested in cryptocurrencies, the market is vulnerable to false starts, according to Todd Sohn, an ETF and technical strategist at Strategas Securities.

We will witness a greater and longer-lasting increase once spot Bitcoin ETFs are legalized, claims Roxanne Islam, associate director of research at VettaFi.

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