Bitcoin rollercoaster: BlackRock ETF drama

The recent flurry of events around Bitcoin and the false information that BlackRock had approved the Bitcoin Exchange-Traded Fund (ETF) was a vivid example of the market’s resilience and fragility in the constantly shifting cryptocurrency ecosystem.

When social media revealed that BlackRock’s eagerly anticipated Bitcoin ETF had received approval from the U.S. Securities and Exchange Commission (SEC), sending the price of Bitcoin soaring towards $30,000, the cryptocurrency community was rocked.

The celebration, however, was short-lived as BlackRock swiftly refuted these rumours, sending Bitcoin’s price down.

The volatility of Bitcoin is triggered by fictitious news of BlackRock’s ETF approval

Recently, there has been a tremendous volatility in the cryptocurrency market. The value of Bitcoin, the first digital asset, surged to almost $30,000, but it fell sharply in response to false reports that BlackRock’s Bitcoin Exchange-Traded Fund (ETF) had been approved.

We examine the events leading up to this tumultuous time in this piece, providing insight into the regulatory landscape, the significance of Bitcoin ETFs, and the wider ramifications for the cryptocurrency market.

False information regarding ETF approval

The news that BlackRock’s eagerly anticipated Bitcoin ETF has received approval from the U.S. Securities and Exchange Commission (SEC) sent social media into a frenzy on October 16.

The joy, though, was short-lived as BlackRock quickly refuted these rumours. Unambiguously, a representative for the massive asset management company said:

“The SEC is still reviewing the application for the iShares Spot Bitcoin ETF.”

The response to BlackRock’s rejection was substantial and quick. After making a fleeting appearance at $30,000, Bitcoin swiftly dropped to about $28,000 following BlackRock’s formal announcement.

The cryptocurrency’s sharp surge and collapse served as a metaphor for how sensitive the market was to changes in the ETF industry.

One of the news organisations that disseminated the false information quickly responded to the phoney news. On social media, a few news organisations expressed regret for the mistake and said, “An internal investigation is underway.”

This episode emphasises the significance of ethical reporting in the context of cryptocurrencies, as data can significantly and quickly affect market dynamics.

It is important to recognise the SEC’s role in the ETF market. The recent event involving BlackRock’s ETF serves as an example, but it’s also critical to take the larger regulatory landscape into account.

The SEC has occasionally tried to impede the creation of exchange-traded funds (ETFs) on Bitcoin. The scene has altered, though, following a recent court ruling that contested the SEC’s denial of Grayscale Investments’ request to launch an ETF on Bitcoin.

Per some analysts, clearance is expected by January 2024

James Seyffart, an ETF analyst for Bloomberg Intelligence, believes that the first Bitcoin ETF may start trading as early as January 10.

A “constructive conversation with the SEC” is mentioned in a joint prospectus update for the Bitcoin ETF from 21Shares and ARK Investment Management. This is typically a good indicator for approval.

An important step towards the broader acceptance of cryptocurrencies would be the regulatory approval of an ETF based on Bitcoin, which would validate cryptocurrencies as a sound investment option for a larger range of investors.

The launch of a Bitcoin ETF will have a significant impact on the cryptocurrency market.

Market participants would be able to invest in Bitcoin through this vehicle without having to deal with the hassle of storing the asset in individual “wallets.” Plus, with the support of a reliable bank like BlackRock, it would split up the risks of volatility and theft between the fund management and a large number of investors.

The positive prediction for Bitcoin

Well-known people in the finance sector expressed positive views about Bitcoin. The founder of SkyBridge Capital, Anthony Scaramucci, believes that Bitcoin’s market capitalization might rise to $15 trillion, exceeding the value of gold.

With a global market capitalization of over $1.08 trillion, Bitcoin is clearly one of the most significant digital assets.

The founder and CEO of ARK Invest, Cathie Wood, caused a stir when she declared that she wanted to see the price of Bitcoin reach $1.48 million by 2030.

Even longtime doubters like Larry Fink, CEO of BlackRock, have modified their opinions. Fink, who formerly referred to cryptocurrencies as a “money laundering index,” is now aware of their potential to help existing currencies overcome their constraints.

Governments are increasingly getting involved in Bitcoin, as demonstrated by the White House’s $5 billion collection of 200,000 bitcoins.

The fact that these assets were taken over by thieves on the dark web shows that even those in positions of authority are beginning to recognise the potential of cryptocurrencies.

In the end, the fictitious information regarding Blackrock’s Bitcoin ETF’s approval

To sum up, the recent event of Bitcoin’s huge price movement brought on by a false story claiming BlackRock’s ETF approval serves as a reminder of the market’s inherent volatility.

The market’s sensitivity to news and information has been brought to light by this wild ride, emphasising the necessity of accurate and responsible reporting in the ecosystem of digital assets.

The regulatory landscape, in especially the SEC’s function, is crucial in deciding how Bitcoin ETFs turn out.

The first ETF on Bitcoins may soon come to pass, despite the SEC’s sporadic opposition to these investment vehicles. One recent development that suggests this is the case is a court ruling that reversed the refusal of Grayscale Investments’ ETF application.

This clearance could be a turning point in the greater acceptance of cryptocurrencies by presenting fresh avenues for investment and more user-friendly processes.

The potential of a Bitcoin ETF to democratise cryptocurrency trading by enabling market participants to obtain exposure to Bitcoin without requiring them to handle the intricacies of private wallets and self-depositing makes it significant.

Furthermore, the participation of major players in the financial industry like BlackRock can aid in distributing the risks related to volatility and market theft, allaying worries that have traditionally deterred institutional investors.