The U.S. Securities and Exchange Commission (SEC) faced an unsettling episode yesterday when its official X (formerly Twitter) account erroneously announced the approval of spot Bitcoin exchange-traded funds (ETFs). This misinformation triggered a flurry of media coverage, with notable outlets such as Cointelegraph, Blockworks, and Reuters initially reporting the news before SEC Chair Gary Gensler promptly corrected the narrative.

Gensler's response, posted just 15 minutes after the misleading tweet, clarified that the SEC had not approved the listing and trading of spot Bitcoin ETFs. The initial social media post, deemed an "unauthorized" communication, presented a fabricated quote attributed to Gensler and displayed an image suggesting SEC's endorsement.

The SEC, in addressing the situation, acknowledged that its @SECGov X/Twitter account had been compromised. The unauthorized tweet, it affirmed, "was not made by the SEC or its staff." Despite the swift correction, the misleading information had already garnered significant attention, accumulating millions of views before removal.

Amid speculation about the SEC's decision on a spot Bitcoin ETF, particularly after various asset managers concluded final filings, the incident underscored the sensitivity surrounding such announcements. Notably, the SEC's statement did not explicitly reveal the commission's plans regarding the potential approval or denial of the investment vehicle.

While the social media mishap triggered market reactions, causing a brief 2.5% surge in BTC's price to $47,901, it soon retreated approximately 7% to $44,701. As of the latest update, BTC's price stands below $46,000. Some social media users suggested that the information in the retracted SEC tweet might have been accurate but released prematurely, a notion amplified by the SEC's unusual activity of "liking" replies to the false tweet.

With the imminent decision expected on a spot BTC ETF from ARK Invest and 21Shares by January 10, industry experts anticipate potential ripple effects, possibly leading to simultaneous approvals for other asset managers. The incident serves as a reminder of the nuanced dynamics between regulatory decisions, social media influence, and market reactions in the cryptocurrency landscape.

Feature Image: Unlock Blockchain