Asset management giant BlackRock has denied rumors that its planned Bitcoin exchange-traded fund (ETF) received approval from the U.S. Securities and Exchange Commission.
The false reports rapidly spread across crypto markets last week, briefly sending the price of Bitcoin up over $1,000. The world’s largest digital asset rallied from around $27,900 to a high of $29,300 within hours.
The surge was driven by investors and traders reacting hastily to unverified claims on social media and non-credible news sites that the SEC had greenlit BlackRock’s spot Bitcoin ETF.
The rumor lacked any official confirmation from regulators or BlackRock itself.
Industry analysts like Twitter user @ali_charts speculated that real SEC approval would trigger a much larger rally, stating “If Blackrock gets the nod from the SEC to trade a spot etf in Bitcoin it will moon.”
But as major outlets worked to fact-check the reports, it became clear that no formal approval had been granted yet. BlackRock subsequently released a statement denying any deal with the SEC on a Bitcoin ETF.
The false information underscores how the crypto market remains prone to manipulation, speculation, and knee-jerk reactions to rumors, especially regarding potential SEC decisions.
Without waiting for credible confirmation, many traders rushed to buy Bitcoin in hopes of profiting from what would be a major regulatory development.
However, engaging with unverified information often leads to poor investment decisions and substantial losses in crypto’s highly volatile environment.
“This is why you don’t trade on rumors. BlackRock ETF approval was a false headline,” noted analyst Lark Davis.
He added, “Buy the rumor, sell the news rarely works with Bitcoin.”
The unsourced rumors also risk undermining trust when legitimate Bitcoin ETF applications do finally get approved. Investors may shrug off real news, having been burned previously by fake reports.
For years, the SEC has rejected applications for spot Bitcoin ETFs while approving only highly limited crypto futures funds. BlackRock and other major financial players have been attempting to break the SEC’s resistance.
While the eventual approval of a full-spot Bitcoin fund would be a milestone, traders are cautioned to await official confirmation directly from the SEC to avoid making hasty decisions they may later regret.
Read also: BlackRock Files Lawsuit Against 44 Copycat Sites.