In the span of just 24 hours, the cryptocurrency market witnessed the liquidation of over $57 million worth of Bitcoin long positions, all stemming from a fictitious claim that emerged on social media. The incident occurred up to 2:40 p.m. in Hong Kong after a misleading post on X (formerly known as Twitter) falsely suggested that the Securities and Exchange Commission (SEC) had given its blessing to BlackRock’s spot exchange-traded fund (ETF).
Although the erroneous post was swiftly removed, it was erroneously reported as fact by a crypto news outlet called Cointelegraph. This misreporting set off a whirlwind of trading activity in the crypto sphere.
In the initial hour alone, approximately $13.6 million of the $57.15 million in total long position liquidations took place. These statistics are based on data from Coinglass, a crypto futures market data provider.
The fake post temporarily boosted the price of Bitcoin, causing it to reach a two-month high of $29,388. During the hour leading up to 9:00 p.m. in Hong Kong on Monday, around $52.63 million worth of short positions were liquidated.
These developments contributed to a total of $154.4 million in liquidations within the past 24 hours, with $97.07 million linked to short positions.
In the world of cryptocurrency trading, liquidation occurs when an exchange forcefully closes a trading position due to the trader’s inability to maintain their initial margin.
It’s important to note that BlackRock’s iShares spot Bitcoin ETF application is still under review. The SEC’s final deadline for responding to BlackRock’s application is set for March 15, 2024. The potential approval of a spot Bitcoin ETF by the SEC is highly anticipated by many, as it could represent a significant turning point for the cryptocurrency industry. Such approval would theoretically pave the way for a wave of institutional investments in the sector.
