Bitcoin’s Sudden Plunge: Elon Musk’s SpaceX Connection and the Cryptocurrency Market:
Bitcoin, the leading cryptocurrency, experienced a sudden and significant drop of up to 9%, causing its value to dip to just over $26,000 in late Thursday trading.
This unexpected decline sent shockwaves through the cryptocurrency market and prompted discussions about the potential catalysts behind the sharp sell-off.
Notably, the drop came shortly after The Wall Street Journal reported that SpaceX, led by entrepreneur
Elon Musk, had written down the value of its bitcoin holdings by $373 million over the past two years.
The Rapid Fall
Bitcoin’s price swiftly plummeted around 6 p.m. ET on a Thursday evening, shedding as much as 9% of its value to reach just over $26,000.
The decline continued, and by 7 p.m., the cryptocurrency was trading around $26,400.
This unexpected drop raised eyebrows and led market participants to speculate about the potential reasons behind this sharp decline.
The SpaceX Connection
Hours before the dramatic drop, The Wall Street Journal released a report stating that SpaceX, a pioneering space travel company founded by Elon Musk, had written down the value of its bitcoin holdings by a combined total of $373 million.
These markdowns occurred in both 2021 and 2022, hinting at a possible shift in the company’s stance toward cryptocurrency.
Additionally, the report mentioned that SpaceX had also sold a portion of its Bitcoin holdings.
Elon Musk, the CEO of SpaceX, has been known for his advocacy and support of cryptocurrency in the past, which adds complexity to the situation.
Speculation and Interpretation
The suddenness of the sell-off and its close proximity to The Wall Street Journal’s report led to speculation within the cryptocurrency community.
Ryan Rasmussen, a researcher at Bitwise Asset Management, characterized the drop as “one of the most brutal minute-by-minute selloffs” in Bitcoin’s history.
He attributed the sell-off to a potential connection between Elon Musk and SpaceX, suggesting that this dramatic decline might be influenced by the company’s actions.
Rasmussen also noted that such sharp market movements could be driven by short-sighted and retail-driven reactions.
Elon Musk’s Influence
Elon Musk’s role in the cryptocurrency market cannot be underestimated. In 2022, Tesla, another company led by Musk, revealed that it had sold around 75% of its bitcoin holdings after investing $1.5 billion in the cryptocurrency.
Despite this move, Musk has been vocal about his support for cryptocurrency, and his statements have previously influenced market sentiments.
A recent study even found that Musk’s mentions of specific altcoins on social media have led to price boosts for those cryptocurrencies.
His influence on the market dynamics adds an additional layer of complexity to Bitcoin’s recent fluctuations.
The Federal Reserve and Market Sentiments
Bitcoin’s journey to its recent decline began earlier, possibly influenced by the Federal Reserve‘s release of minutes from its July policy meeting.
The minutes might have triggered concerns among investors and contributed to the bearish sentiment surrounding Bitcoin.
Consequently, Thursday’s session saw Bitcoin slumping to its lowest level in nearly two months, further amplifying the overall market uncertainty.