Fake SEC Bitcoin ETF Approval Tweet Breakdown: BTC whiplash causes $56 million liquidation in an hour
Source Fxstreet
- Bitcoin price rose to $48,000 before correcting and falling below $45,000, finally recovering to $46,000.
- The SEC and Chair Gary Gensler confirmed that the regulator’s X account was hacked and that the Bitcoin spot ETF decision is still pending.
- SEC is being asked to conduct a market manipulation investigation, with Senator Hagerty saying that “Congress needs answers”.
The spot Bitcoin ETF approval is a highly influential subject in the crypto market at the moment, and just what the market feared occurred when the Securities and Exchange Commission’s (SEC) account was hacked earlier today. Here is a breakdown of what happened, when it happened, and how the market reacted to it.
Bitcoin price crashes following SEC hack
- Around 21:00 UTC, the official X, formerly Twitter, account of the SEC tweeted out that all spot Bitcoin ETF applications had been approved.
- This led to a sudden surge in the crypto market that sent Bitcoin price rallying by 2.66%, hitting $47,897 at the peak up from $46,500.
- The approval of the ETFs spread like wildfire and soon caught the attention of SEC Chair Gary Gensler, who, from his official account, tweeted,
“The SEC twitter account was compromised, and an unauthorized tweet was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.
- This led to a correction of the rallies, and Bitcoin price dropped from the peak of $47,897 to $44,903, marking a 3.75% drop in the span of a few minutes.
BTC/USD 1-hour chart
- The news of the compromise was soon confirmed by the SEC itself as it regained control of the account, tweeting the same.
- The confirmation from the SEC stabilized the market, and Bitcoin price began recovering gradually, reaching $46,174 at the time of writing.
- However, the damage was already done as over $56 million worth of open positions were liquidated. This included $32 million worth of long positions and $24 million worth of short positions.
Bitcoin liquidations
- Soon after, Fox Business reporter Charles Gasparino tweeted that Securities lawyers stated that the SEC must investigate itself for “market manipulation”. Not much later, Senator Bill Hagerty also commented on the incident, saying that Congress needs answers. His tweet read,
“Just like the SEC would demand accountability from a public company if they made such a colossal market-moving mistake, Congress needs answers on what just happened. This is unacceptable.
- The Bitcoin spot ETF is a volatile topic since it would mark a historic moment for the crypto market. The deadline for the approval of the more than a dozen applications is Wednesday, January 10, and the expectations of a green light from the SEC are running high as it would create a precedent for spot crypto ETFs in the future.
- Nevertheless, the crypto market recovered from the incident quickly and made its move at trolling the SEC for their breach of security with the likes of Twitter Chief Technology Officer (CTO) David Schwartz joining, tweeting,
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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