MCS Crypto News - Issue #13

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Hi all! Happy Bitcoin ETF Approval! …. or not. October 16th, 2023 was a roller-coaster ride for crypto fans.

Let’s dive in.

🕵️‍♂️ The Scenario Unveiled: What Really Happened

A post by CoinTelegraph, a seemingly reputable crypto news outlet, suggested a Bitcoin Spot ETF had been approved by the U.S. Securities and Exchange Commission (SEC). It swirled around X (twitter) and in minutes, the news had been seen by thousands - and even reported by other news sources that saw the original post.

Although this fake news was wiped off the platform within the span of 30 minutes, it was able to considerably affect Bitcoin prices.

🌪 A Whirlwind in the Market

The market responded rapidly and intensely to the report:

• Bitcoin took a big leap from a value of $27,900 to $30,000 post this news.

• A swift correction was observed as the prices dropped back to $28,000, following skepticism from analysts and reporters.

This incident led to nearly $100 million within an hour after the fake news was released.

Liquidation refers to when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin.

First, the short sellers were liquidated during the pump to $30,000, and then the long leveraged positions placed after the pump got liquidated on the fall back to $28,000.

🔍 The Reality Check

The buzz proved to be baseless as BlackRock confirmed that the report was false. Furthermore, the SEC website displayed no approvals for a spot bitcoin ETF.

CoinTelegraph was far from apologetic. Their CEO brushed off the incident and stated that when it comes to reporting the news, if you're not first, you're last. Classy.

Interestingly enough, it seemed that someone with an account titled "Cointelegraph" placed a 50x leveraged long position right before Cointelegraph posted the fake news. They made over $2,000,000 during the subsequent pump to $30,000. It appears to me that this was explicit, planned market manipulation. Find them, and send em to jail.

🚀 Market Outlook: The Aftermath

This event underpins the potential boost in Bitcoin prices following a genuine spot ETF approval. Larry Fink, the CEO of BlackRock, said after the incident that they're seeing interest in crypto from clients all over the world, as people look for a "flight to quality."

Crazy, right? The CEO of the world’s largest asset manager, a former skeptic, is now onboard the Crypto Express. 💰🚀

Reddit announced its discontinuation of the Community Points program. This move resulted in significant drops in the token values associated with this program: MOON, BRICK, and DONUT.

🕵️‍♂️ The Backstory: What Led to the Decision

The Community Points program was rolled out in 2020 as a blockchain initiative intending to incentivize creators and developers. Subreddit moderators could distribute crypto tokens — MOON in r/CryptoCurrency, BRICK in r/Fortnite, and DONUT in r/ethtrader — as rewards for contributions. However, Reddit encountered difficulties when trying to expand the program across its platform.

"The regulatory environment has added to scalability limitations," one of the Reddit community team posts explained. Despite efforts to improve efficiency and lower costs last year, notably through migrating to the Arbitrum Nova layer-two solution, rolling out Community Points network-wide posed challenges.

Tim Rathschmidt, Reddit's Director of Consumer and Product Communications, stated that the company is prioritizing rewards programs such as the Contributor Program, which are easier to scale. Elaborating further, Rathschmidt said, "Part of why we’re moving past this product is that we’ve already launched, or are actively investing in, several products that accomplish what the Community Points program was trying to accomplish while being easier to adopt and understand."

📉 The Aftermath: Market Impact

After the decision to discontinue the program was publicized, the crypto market responded accordingly:

• The MOON token value plunged by 85%.

• BRICK experienced a drop of nearly 70%.

• DONUT declined by 60%.

🔭 What Lies Ahead

Kraken's CEO, Jesse Powell, suggests that Reddit should offer a redemption path for community points. For now, it remains to see how the discontinuation will influence the wider crypto community, and whether Reddit or another platform will introduce a similar token-based initiative in the future.

I think they absolutely should allow some sort of redemption. They screwed people that had bought or were holding the token. I hope they get sued.

Remember, navigating the crypto world requires you to stay alert and conscious of any changes that might affect your portfolio. 💰🛡️

That’s all for today. We’ll see you tomorrow for MCS Crypto 101.

Thank you so much for subscribing to Make Crypto Simple.

Chris Schawel


^{The content provided in this newsletter is for entertainment purposes only and should not be construed as financial advice. All information, including but not limited to market analysis, price predictions, and investment strategies, is purely speculative in nature. We strongly recommend conducting your own research and consulting with a qualified financial advisor before making any investment decisions. We are not responsible for any losses incurred as a result of the information presented in this newsletter.}