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What you need to know today
Bitcoin slides after false ETF approval post
Bitcoin slid Tuesday after the Securities and Exchange Commission‘s social media account — which was compromised — sent a false social media post stating the regulatory agency had approved a long-awaited bitcoin exchange-traded fund. Immediately after the first post, the world’s largest cryptocurrency jumped to as high as $47,901 to its highest level since March 2022, but later traded lower by 3%.
Markets retreat
Wall Street’s benchmark S&P 500 index ended with small declines on Tuesday, closing 0.15% lower, while the Dow Jones Industrial Average shed 0.42%. The Nasdaq Composite, however, inched 0.09% higher by close as it bounced off a 0.9% slide from earlier in the session. Shares of tech stocks continued to rise and stave off bigger declines. Asia stocks bucked that trend, with Japan’s Nikkei 225 index blowing past 33-year highs after jumping more than 2%, as health tech and consumer services stocks rose.
Is China’s consumption story over?
China’s consumer sentiment may finally start to improve from here, after last year’s uneven recovery as the economy struggled to rebound from the pandemic doldrums. Goldman Sachs says that while a slowdown is somewhat inevitable, it still expects services consumption to show more resilience than goods.
HPE to buy Juniper Networks
Hewlett Packard Enterprise will buy Juniper Networks for about $14 billion in an all-cash deal, the company confirmed. That works out to about $40 per share — Juniper shares jumped 22% to close at $37.05 after the news. The acquisition will bolster HPE’s existing networking business — which was the company’s top-performing segment — and speed up growth, the company said.
[PRO] AI-related plays
Bank of America picked its “key AI suppliers,” naming its top stock picks with significant upside potential at a time when artificial intelligence is all the rage.
The bottom line
Bitcoin is arguably the world’s most popular cryptocurrency and has had a dramatic run-up in gains last year. Most of it was fueled by hype around a bitcoin exchange-traded fund that sparked a jump of about 60% in the cryptocurrency over the last three months.
A false social media post about the approval of such an ETF by the SEC was the last thing eager crypto bros were hoping for.
Market participants were anticipating an update from the regulatory authority as soon as Wednesday as it would mark the deadline for the SEC to approve or deny the application.
But bitcoin quickly sold off after the SEC said its X account had been compromised, confirming that it had not approved the Ark 21 Shares spot bitcoin ETF application, among others.
In early Asia hours, social media X said it had completed a preliminary probe into the compromised account of the SEC, noting that it was not due to any breach of X’s systems, but rather due to a “third party” and “unidentified individual.”
“The sell-off is showing a rattled market,” said Michael Rinko, research analyst at Delphi Digital. “This kind of high-volume boomerang event probably spooked some people and led to people taking some risk off the table but the initial market reaction is encouraging.”
It is, however, still widely expected to be approved by the SEC but some investors believe that considering bitcoin’s spectacular rally, it could also mean the day one effect of an approval may just turn out to be a sell-the-news event.
