SEC Hack Triggers Massive Crypto Liquidations: Bitcoin ETF Approval Fake Tweet Sends Market into Chaos

The cryptocurrency market was rocked by a tweet from the SEC's X account announcing the approval of all Spot Bitcoin ETFs.

SEC’s mistake results in $220 million worth of crypto being liquidated due to Bitcoin Spot ETF issue

Source: Coinglass

On Tuesday, the crypto market experienced a roller coaster ride due to a tweet from the official X (formerly Twitter) account of the United States Securities and Exchange Commission (SEC). The tweet claimed that all Spot Bitcoin ETF applications had been approved, causing an immediate surge in price. However, this surge was short-lived as it was soon revealed that the tweet was fake and the SEC’s social media account had been compromised.

SEC Hack Triggers $220 Million In Liquidations

This fake tweet had a significant impact on the crypto market, leading to over $220 million in liquidations within the last 24 hours. According to data from CoinGlass, this liquidation event is the second-largest so far in 2024. Over 70,000 traders became victims of this event, with both long and short traders being affected by the price fluctuations of Bitcoin and other assets in the market.

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Out of the more than $220 million in liquidations, long trades accounted for 60.47% with $133.5 million, while short liquidations amounted to $87.29 million. The largest single liquidation order during this time occurred on the ByBit exchange, where a $6 million trade was liquidated across the BTCUSD trading pair. Binance and OKX were the market leaders in terms of total liquidations, with $83.88 million and $73.97 million respectively.

Spot Bitcoin ETF Is A Sell The News Event?

The approval of a Spot Bitcoin ETF has been a highly debated topic in recent weeks. Experts have shared their insights on whether the approval has already been priced in and if an announcement would lead to a price decline.

Crypto analyst Andrew Kang believes that approval would lead to a scramble among applicants to secure a share of the expected $10 billion to $20 billion in fees. They will be at the forefront of marketing to promote their ETFs. On the other hand, renowned economist Peter Schiff disagrees, suggesting that a spot ETF would eliminate any positive news catalysts for a price rally and result in a ‘sell the news’ event.

However, the events on Tuesday indicate that the ETF might already be priced in, considering the price decline that occurred even before the SEC dismissed the tweet from the hacked account.

Q&A: What else do readers want to know about the SEC hack and Bitcoin ETF approval?

Q: How did the SEC’s social media account get hacked?

A: The exact details of the SEC’s social media account hack have not been disclosed. However, it is a reminder of the importance of strong cybersecurity measures and the need for organizations to implement robust protocols to protect their digital assets.

Q: What are the potential consequences of the SEC hack and fake tweet?

A: The consequences of the SEC hack and fake tweet are significant. It has caused market volatility, leading to massive liquidations and losses for traders. This incident also undermines the credibility of official announcements, creating distrust among market participants.

Q: What are the implications for the future of Bitcoin ETF approval?

A: The fake tweet incident raises questions about the SEC’s ability to effectively communicate important decisions regarding Bitcoin ETFs. It highlights the need for improved security measures and transparency in regulatory processes. It is unclear how this incident will impact the future approval of Bitcoin ETFs, but it may result in increased scrutiny and cautiousness from regulators.

Future Outlook and Investment Recommendations

The SEC hack and the subsequent market reaction demonstrate the sensitivity and vulnerability of the crypto market to external factors. The volatility and risks associated with such events emphasize the importance of a well-diversified investment strategy and thorough risk assessment.

Investors should continue to monitor developments in the regulatory landscape and consider the potential impact on the market. While the approval of a Spot Bitcoin ETF could bring significant investment and increased mainstream adoption, it is essential to remain cautious and informed about the risks involved.

As the market continues to evolve, investors should stay informed about emerging trends and developments. Conducting thorough research, seeking expert advice, and diversifying investment portfolios can help mitigate risks and capitalize on potential opportunities.

References:

1. SEC Faces Backlash from Crypto Leaders Over Erroneous Bitcoin ETF Tweet
2. Spot Bitcoin ETF Issuers in Fee War Ahead of Possible SEC Approval
3. Bitcoin ETF Approval Triggered Crypto Market Rally, Options Data Suggests
4. Jim Cramer Says Bitcoin Is Topping Off, Time To Buy Bitcoin?
5. Crypto Assets Management Surged by 14%, Daily Trading Volumes Recorded 33% Increase in December
6. Valkyrie CIO Believes XRP and Ethereum Spot ETFs Are on the Way
7. Bitcoin Adoption Soars: More In-Person Vendors Accepting Bitcoin, Triple by 2023
8. Bitcoin News: MicroStrategy Buys $615M Worth of Bitcoin, MSTR Stock Outperforms BTC by 21%

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