False SEC ETF Claim Wipes $50B off Bitcoin Market Cap

• Unexpected Market Reaction to False Spot Bitcoin ETF Claims
• Impact on the Digital Asset Market
• Bitcoin's Market Cap Takes a Hit
• Price Fluctuation of Bitcoin
• Losses and Liquidation Post False Claims
• Future Expectations and Predictions

Unexpected Market Reaction to False Spot Bitcoin ETF Claims

Bitcoin$42,260 -0.64%'s market cap experienced a drastic $50 billion plummet in response to incorrect Spot Bitcoin ETF claims from the US Securities and Exchange Commission (SEC). Intriguingly, these claims were a result of the SEC's X account being compromised a day prior, with a false approval message for the investment product being communicated. This was later confirmed to be untrue after it was unearthed that the agency had lost control over the account.

Impact on the Digital Asset Market

Speculations were rife that the digital asset market witnessed a more than $200 million price drop in the course of the day. Notwithstanding these, the expected announcement of a genuine Spot Bitcoin ETF approval is earmarked for later today. In the recent months, the digital asset market has been on tenterhooks for the decision on over a dozen Spot Bitcoin ETF applications. With the SEC expected to give a nod to these applications by January 10th, the false disclosure brought unexpected turbulence to the market.

Bitcoin's Market Cap Takes a Hit

Dramatically, Bitcoin lost $50 million in market cap following the inaccurate SEC Spot ETF claims. According to CryptoSlate, the digital asset took a nosedive from $938 billion to lows of $890 billion. However, following the exposure of the false claims, the asset has since rebounded to nearly $900 billion.

Price Fluctuation of Bitcoin

Bitcoin's price experienced a temporary surge to $48,000 following the false announcement. However, upon discovery of the untruth, the value sharply fell to around $45,000. Overall, within 24 hours, the digital asset market witnessed a more than 1% fall across the board.

Losses and Liquidation Post False Claims

Data from Coinglass reveals that the crypto market saw nearly $220 million liquidated in the aftermath of this event. Traders wagering on increases bore the brunt of the damage, with over $134 million liquidated. On the other hand, bearish traders suffered less, losing only $83.1 million.

Future Expectations and Predictions

Despite this development, approvals are not expected to be negatively affected. Predictions from industry-wide experts indicate Wednesday as the anticipated day for approvals to be granted to over 11 issuers. Trading activities are expected to commence as early as Thursday morning following this.

Edited by Jonathan Stoker