Everyone is waiting for the Bitcoin ETF, and last night it seemed like it was finally happening. The US Securities and Exchange Commission (SEC) said it has allowed trading of Bitcoin ETFs on US stock exchanges. There was cheering in the Bitcoin scene – albeit a little prematurely.
Everyone is talking about ETFs. This year, sooner rather than later, the US Securities and Exchange Commission (SEC) is expected to give the green light to financial instruments designed to bring Bitcoin into the portfolios of institutions, asset managers and pension funds, which, of course, will drive the price of Bitcoin to new heights should. To the Moon!
Last night it looked like that wish would become a reality. Cobra Bitcoin, a well-known early adopter, wrote euphoric on Twitter:
Bitcoin hits the mainstream tomorrow. Nothing will be as it was. Bitcoin will do to finance what the Internet did to information in the 90s. Or what the iPhone did to cell phones in 2007. Congratulations to everyone who has persevered through FUD over the years.
Numerous prominent accounts erupted in cheers, as if it had been Bitcoin’s mission from the start to become the basis of an ETF, and as if the now approved ETF refuted all the skepticism and doubts of Bitcoin critics. Plans for a Bitcoin ETF have been around since 2013, but they have been shot down again and again by the SEC. Now it appears the SEC is bowing to the inevitable. She had recently sent the following tweet:
Today, according to the translation, the SEC approves trading of Bitcoin ETFs on all registered national stock exchanges. The approved Bitcoin ETFs are continuously monitored and subject to regulatory requirements to ensure investor protection. The tweet was quickly viewed 2.6 million times around the world. Probably no tweet from a regulator has ever reached such a large audience in such a short space of time.
Anyone who was online at the right time could watch the Bitcoin price shoot up almost vertically.
The tip is so sharp that it is no longer visible even from a 1-week perspective. Because just a few minutes later it buckled again – and the price fell even lower. Was this the dreaded “Sell The News Moment”? Had the price gain from the ETF been priced in for a long time, so that when the rumor was followed by news, the price could only fall? Was an ETF better for the price when it was still an idea rather than a fact?
Nothing like that! Because the price actually fell for a different reason: the news was a lie, the tweet was a fake. Shortly afterwards, none other than SEC boss Gary Gensler made this clear:
The @SECGov twitter account was compromised, and an unauthorized tweet was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.
— Gary Gensler (@GaryGensler) January 9, 2024
The SEC’s official account, @SECGov, was compromised, Gensler said, and an unauthorized tweet was posted. Gensler still says “Twitter” instead of “X (formerly Twitter)” as many media outlets currently do. The SEC, the chairman continued, has not approved the listing and trading of ETF products based on Bitcoin spot trading.
Well. The price fell, and everyone who had just publicly cheered that the ETF was now through rushed to inform their followers that this was not the case. But how could this happen?
Twitter itself explained es: The SEC account was hacked and the preliminary investigation has been completed. The cause was not an error in Twitter’s system, but rather “an unidentified individual who had control of a phone number that was associated with the SEC account.” In addition, the account did not have two-factor security activated.
Apparently the hacker guessed the password for the account and was then able to log in thanks to the control over the telephone number. Security researcher ZachXBT ironically recalled one Tweet from Gensler on October 24, 2023, reminding people to protect accounts from fraud and identity theft by using strong passwords, setting up two-factor access, and enabling account alerts. Had the SEC’s social media team followed this advice, the account likely would have remained safe.
It remains unclear who the hacker was – and what he planned to do. Maybe he just wanted to make a joke to fool the world, especially the Bitcoin scene. However, it is more likely that he had bought a bet on the price rise before the tweet and thus made large profits in a short period of time.
This could also have consequences for the approval of the ETF. If one tweet is enough to drive up the price of Bitcoin, it should confirm the SEC’s old reservation about a spot ETF – that the Bitcoin market is too easy to manipulate. This means that a tweet that trumpeted the release of the ETF to the world could become ammunition to refuse it.