The price of Bitcoin (BTC) experienced an increase of over 16% on August 13th, following a fake tweet indicating that investment giant BlackRock was considering launching an exchange-traded fund (ETF). According to data from CryptoCompare, the price of BTC spiked from $11,650 to $13,700 in less than 24 hours.
However, after BlackRock issued a statement denying the rumour, the price of Bitcoin dropped, with an estimated $100 million worth of long positions being liquidated. Despite the subsequent correction, the price of Bitcoin is still up 11% since the fake announcement.
The surge in Bitcoin’s price was attributed to the rumour that BlackRock, one of the largest global investment management firms in the world, was considering a Bitcoin ETF. The news originated from a hoax tweet that claimed that BlackRock’s CEO, Larry Fink, had cited the company’s interest in launching a BTC ETF. This was quickly followed by a statement from BlackRock reiterating that the company had no plans to do so.
Despite this, the rumour was enough to cause a large influx of investors buying into the crypto asset, although the move was short-lived. The subsequent correction caused significant losses for many traders, with an estimated $100 million worth of long positions reportedly liquidated.
Analysts believe that the price spike was caused by an acute surge in short-term retail capital entering the market as well as a “squeeze” from the large leverage traders. This could result in significant losses for some traders, as the move caused a sharp correction from prices above the $14,000 psychological level.