According to Bloomberg, a fake news report that BlackRock had received approval to launch a spot exchange-traded fund in cryptocurrency caused a brief 10% rally in Bitcoin, which was quickly reversed.

 The false report was circulated via the X account of crypto media outlet Cointelegraph and triggered a $2,000 price surge that prompted sector-wide volatility and resulted in hourly liquidations topping $100 million. The report was later edited and then deleted shortly after 10 am.

 BlackRock confirmed that the report from Cointelegraph was false. A Bitcoin ETF is an exchange-traded fund composed of assets related to Bitcoin’s price. It is designed to track the performance of the underlying asset or an index of publicly traded Bitcoin. Bitcoin ETFs are traded on traditional exchanges instead of cryptocurrency exchanges.

 The intent behind these ETFs is to give retail and other investors exposure to cryptocurrencies without needing to own them. Currently, the underlying assets within Bitcoin ETFs are Bitcoin futures contracts, which are traded on the Chicago Mercantile Exchange.

Current status of the Bitcoin ETF approval process?

October 17, 2023, the US Securities and Exchange Commission (SEC) has not approved any Bitcoin ETFs. The SEC is required to issue a formal approval or denial within 180 days of the initial filing, but can extend that timeline by an additional 60 days at its discretion.

 The approval of a Bitcoin spot ETF by the SEC could significantly augment mainstream acceptance of Bitcoin investing, increasing its adoption. However, the SEC has rejected every spot-based BTC ETF application it has seen so far. 

The BlackRock application for a Bitcoin ETF is still under review by the SEC. The recent decision by the SEC not to appeal against Grayscale ruling suggests investors think approval looks more likely. The fight to launch a spot Bitcoin ETF in the US passes another hurdle.