Bitcoin and other cryptocurrencies experienced a surge followed by a retracement in value on Thursday after the Securities and Exchange Commission (SEC) gave approval for the first spot Bitcoin exchange-traded funds (ETFs). While the crypto community hailed this move as an endorsement, the price action indicated a “buy the rumor, sell the news” pattern unfolding.
Over the past 24 hours, the price of Bitcoin has risen by 2% to $46,300. Earlier on Wednesday, it had briefly dropped to $45,600 due to a security breach on the SEC’s X social media account. An unidentified group falsely claimed that the agency had approved ETFs, causing a temporary dip. However, Bitcoin ultimately spiked to $47,750 after the SEC officially sanctioned funds from issuers like BlackRock, ARK, and Grayscale on Wednesday. It’s worth noting that this surge was not as high as the initial jump above $48,000 prompted by the hacked SEC post.
The expectation of spot Bitcoin ETF approval has been a major catalyst for the rally in digital assets since last summer. Bitcoin has gained over 80% since mid-June when BlackRock initially filed for a similar fund. However, as anticipation peaked in recent weeks due to the SEC’s impending decision deadline, a scenario emerged wherein traders might “sell the news” upon approval.
Although there is evidence suggesting this scenario has unfolded, with prices remaining relatively stable following the long-awaited catalyst, proponents of cryptocurrencies emphasize the long-term advantages of a spot Bitcoin ETF.
Apart from Bitcoin, other digital assets also showed significant gains. Ether, the second-largest cryptocurrency, surged by 10% to reach $2,620. Smaller tokens or altcoins performed even better, with Cardano experiencing a 17% climb and Polygon seeing a 12% increase. Memecoins such as Dogecoin and Shiba Inu also witnessed an 8% rise each.