On Tuesday, the U.S. Securities and Exchange Commission (SEC)’s official X (formerly Twitter) account sent a tweet stating that all spot Bitcoin ETF applications have been approved, causing a stir in the cryptocurrency market. This was initially followed by a spike in prices, but this was short-lived as prices soon crashed. That’s because the commission’s chairman, Gary Gensler, said the tweets were fake and that the regulator’s social media accounts had been compromised.
SEC hack causes $220 million liquidation
Many crypto traders have found themselves with huge losses following the Bitcoin price fluctuations caused by the SEC hack. According to CoinGlass data, more than $220 million was liquidated in the past 24 hours, making 2024 the second-largest liquidation event ever.
The website also notes that more than 70,000 traders were victims of the liquidation scandal. Also, given that the prices of Bitcoin and other assets in the crypto market fluctuated in both directions, both long and short traders were affected.
However, given the long period of the decline, we found that long traders were the group that made the most liquidations during this period. Of the over $220 million liquidations recorded, long trades accounted for 60.47% at $133.5 million, while short liquidations amounted to $87.29 million during the same period.
For Bitcoin, it was the largest single liquidation order to occur on the ByBit exchange during this period. Single trades worth $6 million were cleared across the BTCUSD trading pair, bringing the total amount cleared on the cryptocurrency exchange to $36.66 million. This is behind market leaders Binance’s $83.88 million and OKX’s $73.97 million.
BTC bears struggle for control | Source: BTCUSD on Tradingview.com
Is Spot Bitcoin ETF a sell news event?
The debate over whether the approval of a Spot Bitcoin ETF is already priced in and whether the announcement will lead to a drop in prices has raged in recent weeks. Experts are seeking opinions on developments after approval.
Cryptocurrency analyst Andrew Kang believes there will be a scramble among applicants to grab as much of the $10 billion to $20 billion they expect to earn from fees if approved. There is. As such, they will all be on the marketing front to promote the ETF.
On the other hand, noted economist Peter Schiff thinks spot ETFs are actually bad for your assets. Apparently, the arrival of the Spot Bitcoin ETF means there is no longer any good news to drive prices higher. So it would end up being a “selling news” event.
But if the performance from Tuesday is any indication, the ETF is already priced in, given the price drop even before the SEC dismissed the tweets from the hacked account. It could mean something.
Featured image from SoFi, chart from Tradingview.com
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