DD Support Board and Research Team

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Hacking the SEC is not a good idea. Someone just kicked the hornet's nest.

Bitcoin spikes to $48k on back of FAKE tweet from SEC stating the crypto ETFs had been approved - but drops to low of day after hack emerges

https://www.dailymail.co.uk/yourmoney/article-12943595/bitcoin-spike-price-stock-caution.html

Bitcoin surged to almost $48,000 on Tuesday after a fake tweet from the US Securities and Exchange Commission (SEC) said it had approved spot-Bitcoin exchange traded funds.

The false tweet, published on X at 4.11pm, came from the SEC's official account and read: 'Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges.'

Fifteen minutes later the SEC's chief Gary Gensler tweeted from his own account: 'The @SECGov account was compromised, and an unauthorized tweet was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.'

After the false tweet the token momentarily jumped to its highest level since around March 2022. Its all time high of just under $70,000 was in November 2021.

Shortly after the second tweet from Gensler on Tuesday early evening its price retreated to under $46,000 and just below where it had been hovering for much of the day.

Questions were immediately raised about who was behind such a 'compromise' and who would benefit.

Gensler's tweet was flooded with responses with other X users questioning how the US financial regulator could have such poor security on its social media channels, especially given its tweets can dramatically move markets.

It is possible that the account was hacked it in a bid to push up the price. Experts have suggested if coins were sold on the spike significant profit could be made.

Accounts for X are typically protected by a password and so-called two factor authentication, which requires an additional code sent to a cell phone or email address.

But experts point out hackers can get round these - either by accessing the phone or email, or getting leverage via blackmail over someone who has access.

Bitcoin had jumped almost 10 percent on Monday to above $47,000 as investors grew increasingly optimistic the SEC will approve a spot Bitcoin ETF.

It comes as regulators face a deadline on Wednesday to approve one of around 10 pending applications from asset managers for a Bitcoin ETF - a fund that would behave like a stock and roughly follow the value of the cryptocurrency.

Head of financial research at Standard Chartered Bank, Geoffrey Kendrick, told investors in a note this week that approval was imminent and 'most likely' to happen on January 10.

Should the approval occur, he predicted bitcoin could reach $200,000 by the end of 2025.

'We see this as a watershed moment for normalizing bitcoin participation by institutional money, and we expect approval to drive significant inflows and price upside for BTC,' wrote Kendrick.

Standard Chartered also predicted that between $50 billion and $100 billion will be invested into US spot bitcoin ETFs by the end of this year.

To justify the position that ETF approval will result in a significant influx of cash into bitcoin, Kendrick referred to investments in gold after the approval of a gold ETF in 2004.

Within ten years the price of an ounce increased by more than four, he pointed out in the note.

'We use this 4.3 times price increase as our base case for bitcoin, but we expect the BTC gains to occur during a shorter one- to two-year period because we expect the BTC ETF market to mature more quickly.'

But Gilles Ubaghs, strategic advisor in commercial banking and payments at Datos Insights, told DailyMail.com last year that investors should exercise caution.

Ubaghs noted that bitcoin was not especially valuable as an actual currency and questioned its long-term ability to hold value.

'It's convoluted, difficult to spend and cash out, [has] a sketchy reputation, and most importantly it's so volatile,' he said.

Nonetheless, he acknowledged that although it has limited practical utility for making payments, it does function as a 'digital asset' that can hold value similar to gold or fine wines.

'Ultimately, as much as bitcoin is a pretty weak payment tool - its also unlikely to die anytime soon,' wrote Ubagh.