Bitcoin drops following BlackRock’s Denial of ETF approval rumors

Bitcoin experienced a sudden surge on Monday but quickly lost most of its upward trajectory after BlackRock, the asset management giant, refuted a crypto news story that claimed the U.S. authorities had given the green light to its notable crypto investment product application.

After a sharp spike that saw its value jump to as much as $29,900, an increase of 10% and its highest since August, Bitcoin was trading with a 3.82% gain at $28,211.

Coin Telegraph, a prominent cryptocurrency news outlet, initially reported that the U.S. Securities and Exchange Commission (SEC) had sanctioned a proposal by BlackRock for a direct bitcoin exchange-traded fund (ETF). This report was, however, withdrawn later.

Bitcoin's value dropped significantly after a journalist from Fox Business revealed on social platform X that BlackRock had refuted the report.

Subsequently, BlackRock confirmed to Reuters that its "iShares Bitcoin ETP application remains under SEC review." Insiders close to the SEC also affirmed that the application has yet to be finalized.

"Today's abrupt rally in the crypto sector underscored its sensitivity to even speculated positive news, particularly with the premature celebrations over the speculated approval of a direct bitcoin ETF," commented Ben Laidler, the global market strategist at eToro.

Coin Telegraph later regretted its prior announcement on platform X, acknowledging that it "resulted in the spread of false details."

The news outlet announced, "We're amidst an internal review. We hold transparency in high regard and will unveil the review's results to our audience once finalized in 3 hours." Their preliminary post was also removed.

The crypto world has been in anticipation of several direct Bitcoin ETF approvals. A significant surge in the sector's investment is anticipated should they gain support. However, the SEC has turned down every direct Bitcoin ETF application thus far, asserting applicants must demonstrate adequate measures against market manipulation.

Joseph Edwards of Enigma Securities in London remarked on the bitcoin market's extreme anticipation for the upcoming direct ETFs. Meanwhile, Lucas Kiely from Yield App mentioned that although the news of SEC's approval on Monday was incorrect, it serves as a valuable precursor for the actual decision.
Kiely added, "Given the pending SEC decision, the market is seeing heightened volatility. Everyone attempts to anticipate it, understanding that the market will swing dramatically based on the outcome."

On October 13, Reuters was the first to disclose that the SEC did not intend to challenge a recent court decision that ruled in favor of Grayscale Investments' direct bitcoin ETF application, a case that the crypto realm is closely monitoring.