Was that the 'Bitcoin ETFs' dress rehearsal' yesterday?

January 10, 2024

2 minute read

In the article "The Bitcoin ETF Dress Rehearsal Yesterday" by Anthony Pompliano on Pomp's Substack, Pompliano describes the events surrounding a misleading tweet from the SEC's Twitter account and its impact on the Bitcoin market. Here's a summary with quotes from Anthony Pompliano:

Initial Market Reaction: Pompliano describes the initial reaction to the SEC's tweet as "madness." He notes, "The market immediately went into euphoria. Bitcoin’s price went from approximately $46,600 to nearly $48,000 in less than two minutes."
Clarification and Market Correction: The euphoria was short-lived as the SEC's tweet was found to be inaccurate. Pompliano observes, "The market quickly readjusted from bullish to bearish and Gensler’s tweet was followed by a quick sell-off within minutes to a level lower than it was pre-announcement."
SEC Account Compromise: The SEC later stated that their Twitter account had unauthorized access. Pompliano comments, "Frankly, this is probably the worse case scenario for regulators at this moment."
Security Lapses: Highlighting the lack of two-factor authentication on the SEC's Twitter account, Pompliano points out, "Another point that people have pointed out is that the lack of 2-factor authentication goes against prior warnings that the SEC Chairman had tweeted out as guidance for market participants."
Investor Lessons: Pompliano suggests three key lessons for investors:
- "The approval, which I expect to happen later this afternoon, will lead to short term euphoria and a multi-thousand dollar rally in price."
- "After the initial price surge, there will likely be a lot of selling that will fall in-line with the classic 'buy the rumor, sell the news' phrase."
- "Traders will position themselves for the next speculative regulatory approval via an ETH ETF as they rotate out of bitcoin."
Market Outlook: Despite the chaos, Pompliano hints at a potential real ETF approval, stating, "In a weird way, although yesterday seemed like a complete shit-show, it actually may have served as a dress rehearsal for the real show later today."
Conclusion: Pompliano reflects on the nature of the cryptocurrency industry: "This industry is full of chaos and uncertainty. There is never a dull moment. Through it all, the people who can keep their head calm and focused are the ones likely to find an outsized financial return."