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Fake News About ETF Causes XRP to Pump and Dump
- XRP jumped 12% in less than an hour, before falling back to its starting price.
- The price hike comes on the back of a fake filing for a BlackRock XRP ETF.
- Bloomberg analyst Eric Balchunas was quick to confirm the so-called ETF was fake, but not before crypto social media spread the misinformation far and wide.
The furor surrounding crypto-based ETFs has heightened in recent weeks, with anticipation for a spot Bitcoin fund mounting. However, the speculation has coincided with an unfortunate rise in social media misinformation. It kick-started with reputable media outlet Cointelegraph falsely reporting that a Bitcoin ETF had been approved, causing a significant spike in the price of BTC. In an even more convoluted move, a fake filing for a spot XRP ETF circled social media, resulting in the coin pump and dumping in a matter of hours.
Paperwork Mimicked BlackRock Filing
BlackRock is one of the world’s biggest investment managers, currently responsible for over US$ 8 trillion (AU$ 12.5 trillion) of assets. The company has recently signalled its intent to enter the crypto space, with official filings for a spot Bitcoin and Ethereum ETF awaiting SEC approval. However, for a few hours yesterday, it appeared the financial giants were poised to add an XRP ETF to their portfolio.
To register their funds, BlackRock uses a corporate investment vehicle based in Delaware. This is the process they went through to apply for their Bitcoin and Ether funds, for example. However this time, the paperwork submitted to the Delaware entity was fraudulent and clearly an attempt to spike the price of XRP in the short-term.
XRP: To the Moon and Back
Many pundits were sceptical that BlackRock would come near XRP with a ten-foot pole, given the asset is currently being investigated by the Securities and Exchange Commission.
Bloomberg analyst Eric Balchunas was quick to dissolve speculation, confirming with BlackRock that the ETF filing was fake and that the institution had no intention of creating an XRP-based fund. However, this did little to stop the news spreading like wildfire through X (Twitter) in the hours prior – with outlets like Altcoin Daily even getting sucked in.
The result? XRP soared from US$ 0.65 (AU$ 1.02) to US$ 0.73 (AU$ 1.14) – a 12% increase – in less than an hour. However, the good news for holders was short-lived, as the eventual confirmation from Balchunas that it was all a ruse sent XRP tumbling back to its initial price.
While the event demonstrates the immaturity of the crypto market, it is also a good lesson for investors to conduct independent research before parting with their money.
Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
