Crypto stocks tumble as SEC debunks ETF approval

Shares of cryptocurrency and blockchain firms plunged in premarket trading on Tuesday after the U.S. Securities and Exchange Commission said its official account on X had been hacked and that it has not yet approved any spot bitcoin exchange-traded funds.

The SEC account had briefly posted a fabricated message claiming several bitcoin ETFs had been given the go-ahead, sparking a brief rally. Bitcoin rose over 1% to $45,593 before retreating amid the confused signals from regulators.

“We eagerly await the SEC’s decision,” said Amberdata analysts, as investors hoped 2023 would finally see the approval of bitcoin ETFs after a decade of rejections.

But this week’s false alarm saw stocks like crypto exchange Coinbase (COIN) fall 1%, blockchain firm Bitfarms (BITF) shed 3.8%, while software company MicroStrategy (MSTR) declined 2.4%.

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Bitcoin miners Riot Platforms (RIOT), Marathon Digital (MARA) and Hut 8 Mining (HUT) were also caught in the selloff, falling between 1.9-2.6%.

The SEC chaos comes as open interest in bitcoin futures hit highs not seen since 2021, indicating traders are betting big on an ETF approval. Instead, this week, so far, has delivered only more Bitcoin Blues.