It feels like something is finally happening in the cryptocurrency market, with its famous volatility all but disappearing over the past six months, replaced by something that feels more like stagnation. During this period, Bitcoin spent most of its time stuck in a range between $25,000 and $29,000.
On Monday, the action was back thanks to a strange series of events. Trade publication CoinTelegraph tweeted “news” that the SEC had approved BlackRock’s Bitcoin ETF application, showing a screenshot purportedly from Bloomberg’s authoritative news terminal. Bitcoin prices briefly rose above $2,000, suggesting a long-awaited rally is coming.
Since this is cryptocurrency, anything can and does happen, so the news turned out to be fake — part of an apparent news-based pump-and-dump scheme, which left CoinTelegraph with an awkward question: Who actually owns their social media key accounts and why this happens. Regardless, the rally disappeared within an hour, and whoever was behind the scheme must have made a fortune on both the puts and calls.
Ironically, however, the fake news revealed some real news – the price increase expected to coincide with the SEC’s approval of a Bitcoin ETF has not happened as many thought. This appears to have driven prices higher throughout. Bitcoin broke above the psychologically important $30,000 level into the early hours of Friday before falling back to around $29,600 by mid-morning.
Meanwhile, a group of social media commentators began trying to decipher (or misinterpret) when the SEC would actually flip the switch and approve the long-awaited Bitcoin ETF. That includes taking advantage of Friday’s D.C. Circuit Court of Appeals, which in August rejected the SEC’s reasons for not approving the ETF, to check the procedural boxes in deciding the facts to dismiss the case. The date seemed unimportant, but it still sparked a flurry of bullish talk.
Things took a further turn on Thursday, when New York’s attorney general sued trading firm Genesis and its parent company DCG, accusing it of working with Winklevoss-owned Gemini to promote 8% returns on cash and Bitcoin — a business that, it turns out, The basis is to make a profit. Huge loans to Sam Bankman Fried’s fraudulent hedge fund. That raises the question of whether the lawsuit against DCG means trouble for its subsidiary Grayscale, one of the frontrunners for a Bitcoin ETF.A lawyer and analyst who focuses on this area gives the answer No Because grayscale is a separate operation, but we’ll see.
All of this underscores how ETFs remain the cryptocurrency’s best hope of emerging from a prolonged slump, and how Bitcoin could be dramatically defined once again.
Jeff John Roberts
jeff.roberts@fortune.com
@JeffJohnRoberts
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