XRP, the native cryptocurrency of the Ripple network, experienced a wild price swing on Saturday, November 14, 2023, after a fake news report claimed that BlackRock, the world’s largest asset manager, had launched an XRP trust. The hoax, which was quickly debunked, caused XRP to surge by 12% in 30 minutes, then plummet back to its previous level, leaving many traders and investors confused and frustrated.
The fake news report was posted on a website that mimicked the official SEC website, with a similar domain name and logo. The report claimed that the SEC had approved BlackRock’s application to register an XRP trust, which would allow investors to gain exposure to the cryptocurrency without holding it directly. The report also cited a statement from BlackRock’s CEO, Larry Fink, praising XRP as a “sustainable and efficient digital asset”.
The report was picked up by several crypto media outlets and social media platforms, including Twitter, Reddit, and Telegram. Some influential figures in the crypto space, such as Anthony Pompliano and Michael Saylor, also shared the news with their followers, adding to the credibility of the hoax.
The Impact on the XRP Market
The fake news report had a significant impact on the XRP market, which was already in a bullish mood after Ripple announced a partnership with the Central Bank of Bhutan to pilot a CBDC project using its technology. The news of the alleged BlackRock XRP trust fueled the demand for XRP, pushing its price from $0.86 to $0.96 in just half an hour, according to CoinMarketCap data. The trading volume also spiked, reaching over $4 billion in the same period.
However, the euphoria was short-lived, as BlackRock soon issued a statement denying the report and clarifying that its XRP trust filing was still under review by the SEC. The SEC also confirmed that the website that published the report was not affiliated with the agency and warned the public to be cautious of online information sources. The fake news report was then removed from the website, but not before causing a lot of confusion and damage.
As the truth came out, the XRP price quickly reversed its gains and dropped back to $0.86, erasing the 12% spike in a matter of minutes. Some traders who bought XRP at the peak of the rally suffered heavy losses, while others who sold at the top made a quick profit. The XRP price volatility also affected other cryptocurrencies, such as Bitcoin and Ethereum, which briefly followed XRP’s upward and downward movements.
The Motive Behind the Hoax
The motive behind the fake news report is still unclear, but some analysts and experts have speculated that it was a deliberate attempt to manipulate the XRP market and profit from the price volatility. Some have suggested that the hoax was orchestrated by a group of traders or hackers who had access to the fake website and the social media accounts of the influential figures who shared the news. They could have used the hoax to create a pump and dump scheme, buying XRP before spreading the fake news and selling it after the price spiked.
Others have argued that the hoax was a prank or a social experiment, aimed at testing the reaction of the crypto community and the media to such a sensational news. They could have wanted to expose the lack of due diligence and verification in the crypto space, as well as the susceptibility of the market to rumors and speculation.
The Lessons Learned from the Hoax
The fake news report about the BlackRock XRP trust was a wake-up call for the crypto industry, highlighting the need for more caution and critical thinking when dealing with online information sources. The hoax also showed the vulnerability of the XRP market to external factors, such as regulatory developments and institutional adoption, which can have a significant impact on the price and sentiment of the cryptocurrency.
The hoax also served as a reminder of the potential and challenges of XRP, which is one of the most controversial and polarizing cryptocurrencies in the market. On one hand, XRP has a loyal and passionate fan base, who believe in its vision of enabling fast and cheap cross-border payments using the Ripple network. On the other hand, XRP faces a lot of skepticism and criticism, especially from the SEC, which has sued Ripple and its executives for allegedly conducting an unregistered securities offering of XRP.
The outcome of the SEC lawsuit, which is expected to be resolved in the near future, will have a major influence on the future of XRP and its market. If Ripple wins the case, or reaches a settlement with the SEC, XRP could see a surge in demand and adoption, as well as more clarity and legitimacy in the eyes of regulators and investors. If Ripple loses the case, or fails to reach a settlement, XRP could face more legal troubles and restrictions, as well as a loss of confidence and support from the crypto community.
