False Bitcoin ETF Approval Tweet Results in $90M Liquidations

• Bitcoin Price Volatility Triggered by Fake SEC Tweets
• Unauthorised Access to SEC's Account
• Immediate Impact on Bitcoin Prices
• Market Reaction: Punters and Automated Bots
• The Aftermath: Liquidation and Its Implications
• Upcoming Bitcoin ETF Decision
• Criticisms on SEC's Security Measures

Bitcoin Price Volatility Triggered by Fake SEC Tweets

The recent fluctuation in Bitcoin$42,260 -0.64%'s price was induced by a series of counterfeit tweets emanating from the U.S. Securities and Exchange Commission (SEC)'s fictitious X account. As a result of this, roughly $90 million worth of Bitcoin long and short positions were liquidated, highlighting manipulation risks within the industry.

Unauthorised Access to SEC's Account

On Tuesday, hackers gained control of the SEC's X account, utilizing it to hint at a favorable decision for the greatly anticipated bitcoin exchange-traded fund (ETF) approval. Subsequent to this, the term $BTC was tweeted before both posts were swiftly removed.

Immediate Impact on Bitcoin Prices

Such tweets led to a quick surge in bitcoin prices, going from $46,800 to $47,680. However, prices plummeted to as low as $45,400 when the tweets were found to be inauthentic.

Market Reaction: Punters and Automated Bots

Market players and automated bots responded rapidly to these tweets. In the ten-minute span following the initial post, over $500 million in futures positions were opened, according to data. These highly leveraged positions, however, suffered as prices fluctuated, with around $50 million in longs being liquidated and $36 million in shorts being affected.

The Aftermath: Liquidation and Its Implications

Liquidation is a process where an exchange forcibly closes a trader's leveraged position due to a partial or total loss of the trader's initial margin. This occurs when a trader fails to meet the margin requirements necessary to maintain the trade open. Such data is useful for traders as it serves as an indicator of leverage being effectively removed from popular futures products, acting as a short-term signal of a drop in price volatility.

Upcoming Bitcoin ETF Decision

A verdict on thirteen proposed bitcoin ETFs is due on Wednesday. Bloomberg analysts predict approval odds at over 90%, while crypto market bettors offer a slightly lower 85%.

Criticisms on SEC's Security Measures

Several participants in the crypto market criticized the SEC for their apparent lax security measures in safeguarding its account. They questioned the ability of the financial regulator to secure trillion-dollar markets if it couldn't even secure its social media accounts.

Edited by Jonathan Stoker