Bitcoin experienced a significant decline, plummeting by up to 9% and settling just above the $26,000 mark. According to data from Coin Metrics, the cryptocurrency’s latest trade value stood at $26,593.68, reflecting a drop of over 8%.
The sharp downturn in Bitcoin’s value came after reports emerged that SpaceX, under the leadership of Elon Musk, had devalued its Bitcoin holdings by a combined total of $373 million in both 2021 and 2022 and had subsequently sold off the virtual currency. The news from The Wall Street Journal had a noticeable impact on Bitcoin’s price within hours.
Ryan Rasmussen, a researcher at Bitwise Asset Management, remarked on the severity of the rapid sell-off, labeling it as one of the most extreme instances in Bitcoin’s history. He attributed the decline to Elon Musk’s influence and speculated that it was largely driven by retail investors. Rasmussen regarded this abrupt drop as a “short-sighted” reaction.
Elon Musk, who also serves as the CEO of Tesla, had previously supported cryptocurrencies and was known for his vocal endorsements. In 2022, Tesla disclosed that it had sold approximately 75% of its Bitcoin holdings after initially investing $1.5 billion in the cryptocurrency.
Musk’s influence on the cryptocurrency market was underscored by a recent study revealing that his mentions of specific altcoins on the social media platform X (formerly known as Twitter) had led to price surges in those digital currencies. Additionally, during the “The B-Word” conference in 2021, Musk emphasized his intention not to rapidly sell off bitcoin holdings despite price fluctuations.
The decline in Bitcoin’s value also coincided with the release of the Federal Reserve’s minutes from its July policy meeting, which had an impact on the cryptocurrency’s performance. As a result of these factors, Bitcoin reached its lowest value in almost two months during Thursday’s trading session.
