The U.S. Securities and Exchange Commission’s (SEC) official X account (@SECGov) fell victim to hackers, who released false information about a Bitcoin ETF approval, leading to a dramatic $90 million liquidation in the futures markets.
This incident occurred on Tuesday, January 9th. The attackers posted two tweets from the SEC’s account: one falsely indicating the long-awaited approval of a Bitcoin ETF, and another simply stating “$BTC.” Despite their brief appearance before deletion, these tweets caused an immediate and tumultuous reaction in Bitcoin’s market value.
A Short-Lived Spike and Subsequent Market Repercussions:
Bitcoin’s value surged by nearly $1,000 in the immediate aftermath, jumping from $46,800 to a peak of $47,680. However, as the news was debunked, it plummeted to $45,400.
The crypto market responded swiftly and intensely. In just ten minutes following the initial tweet, over $500 million in futures positions were opened, leading to a significant amount of liquidation when the market corrected itself.
The volatile price movement resulted in $50 million of long positions and $36 million of short positions being liquidated.
Reduced Leverage and Potential Decrease in Volatility:
Data from the liquidations indicate that this sudden market fluctuation may have culled excessive leverage in prominent Bitcoin futures products, hinting at a possible decrease in short-term market volatility.
This breach raised serious concerns about the SEC’s security protocols, with critics questioning the organization’s ability to protect markets worth trillions if they cannot secure their social media accounts.
Awaiting the Real ETF Decision:
The crypto community is still anticipating the SEC’s decision on the proposed thirteen Bitcoin ETFs, expected on Wednesday. While Bloomberg analysts suggest a more than 90% likelihood of approval, the crypto market remains more guarded, estimating the odds at around 85%.
