On Oct. 16, a false report published by major crypto-focused media outlet Cointelegraph sent shockwaves through the industry over its claim that the U.S. Securities and Exchange Commission (SEC) had approved BlackRock’s application for a spot Bitcoin (BTC) exchange-traded fund (ETF).
In the wake of this news, BTC’s price surged to over $30,000, only to swiftly retreat to around $28,000 once the misinformation was exposed.
This incident has sparked a flurry of responses and discussions regarding its potential influence on the SEC’s forthcoming decision concerning the numerous spot Bitcoin ETF applications awaiting approval or rejection.
CryptoSlate has curated the reactions from major stakeholders in the community below.
Those who think the event has hurt ETF chances
Many of those who think the news has hurt the chances of an ETF approval argued that the regulator has consistently claimed that the market could be easily manipulated, citing the asset’s price movement in their claims.
Over the past decade, the SEC has declined the many spot BTC ETF applications it has received because the fund issuers failed to demonstrate sufficient measures to safeguard investors from market manipulation.
According to stakeholders like Adam Cochran, a partner at Cinneamhain Ventures, the fake news gave the financial regulator more ammunition to deny a spot BTC ETF.
“[Cointelegraph] massively just hurt the chances of real ETF approval… The SEC has literally been looking for any and every excuse to deny it and we just handed them even more ammo.”
This view was also shared by the editor-at-large for Kraken FX, Pete Rizzo, who said the event “sets back an etf by at least 6 months.”
“We aren’t getting that BTC Spot ETF anytime soon, at least not until 2024. One of the reasons the SEC hasn’t approved the ETFs is concerns about market manipulation -and then, this happens,” an X user, Victor commented.
Those who think otherwise
However, some community members had a more bullish view of the event, arguing that the reaction that followed the news was evidence of how much the market anticipates approval.
In an Oct. 16 interview with Fox Business, BlackRock CEO Larry Fink said the market reaction was “an example of the pent-up interest in crypto” and evidence of a “flight to quality.”
Jeff Dorman, the chief investment officer at Arca, a crypto-focused investment management firm, had a more nuanced view. According to him, the SEC cannot cite a “rogue media outlet” report as evidence of market manipulation.
Dorman gave the example of how a false report claiming the White House was attacked in 2013 caused hundreds of billions of losses in equities and debt.
“It doesn’t matter what asset class you are trading; erroneous headlines create whipsaw price action,” He concluded.