It feels like something is finally happening in the crypto markets, whose famous volatility all but vanished in the past six months, only to be replaced by something that’s felt more like stagnation. During this time, Bitcoin has stayed mostly stuck in a sleepy band between $25,000 and $29,000.
On Monday, the action returned thanks to a screwy series of events. Trade publication Cointelegraph tweeted out “news” that the SEC had approved BlackRock’s application for a Bitcoin ETF, showing an alleged screenshot from Bloomberg’s authoritative news terminal. Bitcoin prices briefly shot up over $2,000 in response, suggesting a long-awaited rally was on its way.
Since this is crypto, and anything can, and does, happen, the news turned out to be fake—part of an apparent news-based pump-and-dump scheme that raised awkward questions for Cointelegraph of who exactly had the keys to its social media accounts and why this happened. In any event, the rally petered out within an hour while whoever was behind the scheme presumably made a bundle on put and call options.
Ironically, though, the fake news served to uncover some real news—that price gains expected to coincide with the SEC approving a Bitcoin ETF were not, as many thought, already baked in. This appears to have nudged the price over the course of the week until Bitcoin crossed over the psychologically important $30,000 mark in the early hours of Friday before retreating to around $29,600 by midmorning.
Meanwhile, a band of social media commentators set out trying to read—or misread—the tea leaves for when the SEC will actually flip the switch and approve a long-awaited Bitcoin ETF. This included seizing on the fact that Friday is the day when the Court of Appeals for the D.C. Circuit—which in August rejected the SEC’s reasons for not approving the ETF—checks a procedural box that it is done with the case. The date does not appear to be significant but sets off a spate of bullish chatter all the same.
Things also took a further twist on Thursday when New York’s attorney general sued trading firm Genesis and its parent company, DCG, for joining the Winklevoss-owned Gemini in marketing 8% returns on cash and Bitcoin—a business that turned out to have been based around making huge loans to Sam Bankman-Fried’s fraudulent hedge fund. This has raised the question of whether the lawsuit against DCG means trouble for its subsidiary, Grayscale, which is one of the front-runners to land a Bitcoin ETF. A lawyer and an analyst who cover this space obsessively say the answer is no since Grayscale is a separate operation, but we shall see.
All of this underscores how an ETF remains crypto’s best hope of breaking out of its long-running slump, and how Bitcoin may be defined by drama once again.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
