The price of XRP, the native cryptocurrency of the Ripple network, recently experienced a significant drop of 12%, falling from a high of $0.75 to a low of $0.61. This downturn was triggered by the debunking of a hoax regarding an alleged iShares XRP Trust filing by BlackRock, one of the world’s largest asset management firms.
The false information, which quickly circulated among XRP enthusiasts, claimed that BlackRock had filed paperwork with the U.S. Securities and Exchange Commission (SEC) to create an XRP exchange-traded fund (ETF). This news sent shockwaves through the cryptocurrency market, causing XRP’s price to surge by as much as 10% in anticipation of increased institutional investment.
However, BlackRock promptly denied any involvement in the alleged ETF filing, confirming that the information was entirely fabricated. This revelation led to a swift reversal of the token’s fortunes, with its price plummeting back to its pre-hoax level.
XRP Market Susceptible to Hoaxes
The incident highlights the susceptibility of the cryptocurrency market to false information and underscores the importance of verifying news sources and exercising caution when reacting to market-moving events.
The mechanism behind the hoax involved the creation of a fictitious “XRP ETF” Trust. Jeremy Hogan, a prominent attorney in the crypto space, explained the simplicity and low cost of perpetrating such a fraud. By filing just two documents and paying a nominal fee of $500, a fraudulent “placeholder” can be created on a state website.
Hogan speculated that the criminal behind this hoax could have manipulated the market by buying the token at a low price, selling it at the peak during the hoax-fueled surge, and potentially earning millions in the process.
This incident serves as a reminder of the need for vigilance and critical thinking in the cryptocurrency space, as false information can have a significant impact on market prices.