A Reaction to Approved ETF News
A recent analysis has revealed that the recent Bitcoin price crash was a reaction to what was believed to be genuine news of spot ETFs getting approved, resulting in a classic “sell the news event.”
The analysis conducted by Matteo Greco, research analyst at Fineqia International, found that the price reached a minimum of about $44,750 “exactly one minute before Gary Gensler’s tweet.”
Shortly after the SEC’s announcement, BTC quickly dropped back to $46,700 within one minute, the same price recorded five minutes before the SEC’s announcement. From there, the price continued to decline, reaching a low of about $44,750 at 21:25 UTC, precisely one minute before Gary Gensler’s tweet.
Bitcoin ETFs Not Yet Approved
The SEC is expected to finally approve a batch of ETFs late Wednesday. Executives from some ETF issuers told Reuters they were startled and surprised by the initial tweet. One executive said he was “concerned” that the SEC might delay or withhold approval for spot Bitcoin ETFs as a result of the hack.
Meanwhile, Bloomberg analysts are increasingly optimistic about the approval of a spot Bitcoin ETF in the United States, with the odds now exceeding 90%. In a recent post, Bloomberg ETF analyst Eric Balchunas commented on the likelihood of the SEC rejecting proposals following a flurry of updated filings. Balchunas stated that he would assign a mere 5% chance of rejection.
Hot Take: Bitcoin Price Crash Due to Fake News
A recent analysis suggests that the Bitcoin price crash was not caused by fake news but rather by a reaction to what was believed to be genuine news of spot ETFs getting approved. The price reached its lowest point just before Gary Gensler’s tweet, indicating that the crash was a “sell the news event.” While the SEC announced the approval of Bitcoin Spot ETF filings, Chairman Gensler clarified that this was not the case. This incident highlights the volatility and sensitivity of the crypto market to news events. Despite this setback, there is still optimism regarding the approval of a spot Bitcoin ETF in the United States.
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