Did the Fake Bitcoin ETF Announcement Prove an SEC Approval Is a ‘Sell-the-News’ Event?

On Tuesday evening, the U.S. Securities and Exchange Commission (SEC) said its X/Twitter account was hijacked to wrongly claim it had approved hotly anticipatedbitcoin exchangetrade funds (ETFs), causing bitcoin [BTC] to spike and then slip in price.

Meltem Erdem is CoinDesk Turkey’s cybersecurity columnist.

In a now-deleted tweet, the financial regulator falsely announced: “Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges. The approved Bitcoin ETFs will be subject to ongoing surveillance and compliance measures to ensure continued investor protection.”

The tweet was quickly removed. SEC Chair Gary Gensler confirmed the message should not have gone out, and that no approval had been granted.

While the incident certainly raises concerns over how the SEC secures its social media accounts as well as the protections needed to prevent market manipulation in the digital age, the biggest question raised by the bogus tweet is how the market will respond when a bitcoin ETF is ultimately approved.

See also: Fake Bitcoin ETF Approval Tweet Causes $90M in Liquidations

With this fake tweet, we got to see how the market could react, which was perhaps the point of the stunt.

Bitcoin’s price spiked to $47,900 immediately following the first tweet, and then dropped 1.5% to $46,247 after the news was debunked.

There’s a lot riding on these funds, and the market has spent months (if not years) awaiting the SEC’s decision on a number of spot bitcoin ETF applications in the U.S. Although industry speculators are confident an exchange-traded fund will be approved, the SEC, known for its anti-crypto stance, may reject the applications once again after this incident. The commission is due to make a decision by Wednesday.

Bitcoin has climbed 164% in the past year following the market crash beginning at the end of 2021, in large part driven by the growing hype around ETFs. While there are valid reasons to believe spot bitcoin ETFs will bring capital into the sector, many speculate the moment of approval will be a “sell the news” event.

See also: Bitcoin ETFs: The Bull Case

Spot bitcoin ETFs are a way for investors to gain exposure to bitcoin’s price movements, without having to directly buy the cryptocurrency. There are currently 13 live applications in the…