April 12, 2024

Bitcoin ETF Disapproval Leads to Price Volatility: What You Need to Know

What is Bitcoin: The Ultimate Guide for Beginners

What is Bitcoin: The Ultimate Guide for Beginners

Bitcoin (BTC) recently encountered a significant price surge and subsequent dump driven by a false report of a spot exchange-traded fund (ETF) approval. The price surged from $27,900 to $30,000 after a deceptive post on the social app X (formerly Twitter) claimed that a spot ETF had been approved. This erroneous information led to a flurry of trading activity and nearly $100 million in liquidations within an hour.

The false post was eventually removed, but it had already generated enough interactions to influence the cryptocurrency’s price significantly. Bitcoin swiftly fell from $30,000 to $28,000 as skepticism from analysts and reporters emerged. BlackRock confirmed that the report was false.

Market Impact

  • CoinGlass data revealed that approximately $81 million in short positions (bets against higher prices) were liquidated during the surge to $30,000. Additionally, around $31 million in long positions (bets on higher prices) were liquidated during the subsequent correction.
  • Liquidation occurs when exchanges forcibly close leveraged positions due to a trader’s inability to meet margin requirements. In this case, traders were unable to maintain their positions as their initial margin was partially or entirely lost.

SEC’s Official Stance on Spot Bitcoin ETF

  • The U.S. Securities and Exchange Commission (SEC) has not granted approval for a spot bitcoin ETF, as verified by the SEC website. It was also reported that the application from BlackRock, a leading investment management firm, is still under review.


  • A recent SEC decision not to appeal a ruling involving Grayscale led to speculation that Grayscale’s Bitcoin Trust (GBTC) might eventually be converted into a spot ETF. This news had a positive impact on Bitcoin’s price, contributing to a 4% increase in Asian trading hours.
  • The incident underscores the sensitivity of the cryptocurrency market to breaking news and rumors. Traders and investors are advised to exercise caution and verify information before making trading decisions.

Please let me know if you would like more details or have any specific questions regarding this development.