After asset management BlackRock rejected a rumor in the cryptocurrency media that U.S. authorities had accepted its high-profile application for a cryptocurrency investment product, bitcoin spiked on Monday before losing almost all of its gains.

The notoriously volatile cryptocurrency known as bitcoin was recently up 3.82% at $28,211 after soaring as much as 10% to $29,900, its highest level since August.

Before eventually retracting the article, the cryptocurrency news site Coin Telegraph claimed that the U.S. Securities and Exchange Commission had granted a request by significant asset management BlackRock for a spot bitcoin exchange-traded fund. But after a Fox Business reporter said on the social media network X that BlackRock had rejected the allegation, bitcoin dropped significantly.

Later, BlackRock told Reuters, “the iShares Bitcoin ETP application is still under review by the SEC.” It was also confirmed by insiders at the SEC that the application is still pending.

According to Ben Laidler, global markets analyst at eToro, “Crypto markets have just demonstrated how sensitive they are to any potential good news, with their premature rally today on rumors of the approval of a spot bitcoin ETF.”

Coin Telegraph posted an apology on X for its previous article, which “led to the dissemination of inaccurate information.”

“There is now an internal inquiry going on. We will share the results with the public when the inquiry is over in three hours since we are devoted to openness, according to Coin Telegraph. It also took down the original post.

Markets for cryptocurrencies have been waiting for updates on several pending spot bitcoin ETF applications, which, if successful, are likely to increase investment in the industry. The SEC rejected all spot bitcoin ETF applications because the applicants had not demonstrated their ability to safeguard investors against market manipulation.

“The move does show how monomaniacally obsessed the bitcoin market is with the coming spot ETFs,” said Joseph Edwards, head of research at London-based cryptocurrency company Enigma Securities.

According to Lucas Kiely, chief investment officer at Yield App, the report that the SEC had approved a spot bitcoin ETF on Monday was a “false alarm.” Still, it was also a “good dress rehearsal” for the agency’s final judgment on the applications.

“Headline risk is creating a lot of volatility ahead of this SEC announcement, with everyone trying to get ahead of it as the market will move markedly either way depending on the decision,” he stated.

In a case that the cryptocurrency sector has keenly followed, Reuters was the first to disclose on Oct. 13 that the SEC will not appeal a recent court decision that determined it was improper to deny an application from Grayscale Investments to form a spot bitcoin ETF.

In the upcoming week, the District of Columbia Court of Appeals in Washington is anticipated to issue a mandate outlining how its ruling in the case should be carried out, which will likely include directing the SEC to review Grayscale’s application.