Bitcoin surrenders its previous gains following BlackRock’s denial of a cryptocurrency-related news report.

Bitcoin experienced a sudden surge in value on Monday, triggered by a subsequently retracted media report. The cryptocurrency’s price shot up before retracing nearly all of its gains following the denial by asset management giant BlackRock regarding a cryptocurrency media report. The report in question suggested that US regulators had granted approval for BlackRock’s high-profile application for a cryptocurrency investment product.

Bitcoin, known for its notorious price volatility, initially soared by as much as 10% to reach $29,900, its highest value since August. However, it ultimately settled at $28,211, reflecting a 3.82% increase, or approximately €26,600.

The catalyst for this wild price swing was an article from crypto news outlet Coin Telegraph, which initially claimed that the US Securities and Exchange Commission (SEC) had given the green light to BlackRock’s application for a spot bitcoin exchange-traded fund (ETF). Shortly after, Coin Telegraph retracted the story.

The situation took another turn when a Fox Business reporter, using the social media platform X (formerly known as Twitter), stated that BlackRock had contradicted the report. Subsequently, BlackRock confirmed to Reuters that its application for the iShares Bitcoin Exchange Traded Product (ETP) was still awaiting review by the SEC. Sources close to the SEC verified that the application remained in the pending stage.

This episode underscores the cryptocurrency market’s hypersensitivity to potential positive developments, as it reacted swiftly to the premature news about the approval of a spot bitcoin ETF.

Coin Telegraph issued an apology on X for its earlier post, acknowledging the spread of inaccurate information. They also initiated an internal investigation, promising to share its findings with the public within three hours, and removed the initial post.

The cryptocurrency community has been eagerly awaiting updates on multiple pending spot bitcoin ETF applications, as their approval is anticipated to drive significant investments into the sector. However, the SEC has consistently rejected such applications on the basis that the applicants have not demonstrated their ability to safeguard investors from market manipulation.

Joseph Edwards, head of research at London-based crypto firm Enigma Securities, noted the bitcoin market’s obsession with the impending spot ETFs and referred to the latest news as a “dress rehearsal” for when the regulator makes a final decision on these applications.

The uncertainty around the SEC’s forthcoming announcement is generating considerable market volatility, as market participants are trying to position themselves ahead of the decision, which is expected to significantly impact the cryptocurrency market.

Notably, on October 13, Reuters reported that the SEC would not appeal a recent court ruling, which found its rejection of an application from Grayscale Investments to create a spot bitcoin ETF was unfounded. This case has been closely monitored by the cryptocurrency industry. The District of Columbia Court of Appeals in Washington is expected to issue a mandate in the coming week, providing guidance on how the SEC should handle Grayscale’s application.