A recent incident involving fake tweets from the U.S. Securities and Exchange Commission (SEC)’s account on the platform X (formerly Twitter) led to significant turmoil in the Bitcoin market, resulting in approximately $90 million in liquidations.
Hackers gained access to the SEC’s X account on Tuesday and posted misleading information about the approval of a long-awaited Bitcoin exchange-traded fund (ETF). The fraudulent posts, which briefly included a message simply stating “$BTC,” were swiftly removed once identified as false.
These deceptive tweets had an immediate and substantial impact on Bitcoin prices, which surged from $46,800 to a peak of $47,680, only to plummet to around $45,400 as the market recognized the deception.
The rapid price fluctuations triggered a frenzy among traders and automated bots. In the ten minutes following the fake announcement, over $500 million in futures positions were opened. However, the volatility led to significant liquidations: $50 million from long positions and $36 million from short positions.
Liquidation in this context refers to the forced closure of a trader’s leveraged position by an exchange, usually due to a lack of sufficient funds to maintain the trade, resulting in a loss of the trader’s initial margin.
These liquidations serve as important data for traders, indicating a cleansing of leverage from futures products and potentially signaling a short-term decrease in market volatility.
The crypto community is keenly awaiting a decision on thirteen proposed Bitcoin ETFs, with Bloomberg analysts estimating over a 90% chance of approval and market bettors slightly less optimistic at 85%.
In light of this security breach, there has been criticism from the crypto community regarding the SEC’s digital security measures. Some market observers questioned the SEC’s ability to protect trillion-dollar financial markets if it cannot secure its social media accounts.