Bitcoin Runs to $30K on Rumors That Could Soon Be Real
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| By Marija Matic |
In a whirlwind of events today, the cryptocurrency world was shocked by the report of the Securities and Exchange Commission’s supposed approval of the iShares Bitcoin (BTC, “A-”) spot ETF.
Cointelegraph disseminated this news this morning, sending Bitcoin's price soaring to $30,000 within a matter of minutes. The news was quickly picked up by Benzinga, Reuters and Bloomberg terminals, none of which properly vetted the original source.
The jubilation was short-lived as it swiftly became apparent that these claims were based on mere rumors. Fox reporters reached out to BlackRock (BLK), the applicant for the iShares spot ETF, which promptly debunked the false reports. Its Bitcoin spot ETF application remains under review.
Nevertheless, the damage was done: The erroneous news sparked a staggering $100 million in liquidations within a mere hour. Cointelegraph has apologized since and is conducting an internal investigation regarding the mistake.
Before this tumultuous episode, Bitcoin had already experienced a notable 3.62% increase in value for the day and several Bitcoin forks registered double-digit gains.
Once the story was retracted, an instant market correction naturally ensued. Nonetheless, Bitcoin presently holds its ground above $28,000, reflecting an increase of over 5% from the previous day.
This suggests that the market is ready for a significant surge in buying sentiment once the actual spot ETF approval arrives. Even more, it clearly showed that this potential development has not yet been factored into the current pricing.
Now, in strictly technical terms, today's wick has led to the potential formation of a bearish reversal pattern known as the "head and shoulders,” as you can see below:
If the pattern plays out, we will see a correction in the near future.
However, as today's events have demonstrated, the cryptocurrency market is notoriously unpredictable. This roller-coaster day serves as a stark reminder of the market's inherent volatility and susceptibility to misinformation. Such susceptibility may raise concerns among regulators responsible for approving applications, again.
Nevertheless, it's essential to recognize that the additional volatility doesn't diminish the fundamental value of Bitcoin and the reasons people invest in it. High-net-worth individuals have been increasing their Bitcoin holdings, with Santiment data revealing a record 157,400 wallets now containing a minimum of 10 BTC.
This surge represents an impressive 8.12% growth in Bitcoin's large holders — also known as its shark and whale population — since the onset of the bear market in February 2022, a period when smart investors began accumulating. Prior to this phase, a significant reduction in their numbers was observed, primarily attributed to profit-taking activities during the bull market.
An additional sign indicating the shift toward bullish sentiment among traders, particularly in anticipation of spot ETFs, is the evolving scenario of Grayscale's Bitcoin fund transition into a spot ETF.
Grayscale's Bitcoin fund operates as a closed-end fund, which means its market price can diverge from the actual value of the Bitcoin assets it holds. For nearly two years, GBTC has persistently traded at a substantial discount, but this discount has notably narrowed due to growing optimism about the SEC's approval of the fund's conversion.
Presently, the discount for Grayscale has reached its tightest level since December 2021, standing below 16%.
This sharp reduction contrasts with a substantial 44% discount observed in June. The renewed enthusiasm for GBTC was sparked by the SEC's recent decision not to challenge Grayscale's legal victory, providing further support for the fund's conversion.
Notable News, Notes & Tweets
- Tether (USDT, Stablecoin) has frozen 32 addresses that were found to be linked to terrorism and warfare in Israel and Ukraine. Up to this day, Tether has frozen $835 million by aiding 31 agencies worldwide.
- Ferrari has started to accept crypto as payment for its cars in the U.S. and will extend the offering to Europe following requests from its wealthy customers.
- CoinList has introduced staking for accredited investors with 6.96% APY for NEAR and 3.76% APY for ETH. Among the assets to be supported in the future is Flow (FLOW, Not Yet Rated) with 8.99% APY.
- Mastercard (MA) has successfully completed a trial involving wrapping central bank digital currencies or CBDCs, on different blockchain.
What’s Next
The sudden blast to $30,000 in a matter of minutes, driven by false reports of a BTC spot ETF, provides a glimpse into how the market may respond when the real news arrives: If the false news sent it to $30,000 in a matter of seconds, what will happen when it’s actually approved?
Spot ETF is not priced in and that's good news.
Savvy investors will be looking to any weakness in the market to load up on BTC … before it does get priced in.
Best,
Marija
