Bitcoin experienced a significant drop, plunging below the $25,000 benchmark, following the announcement that Elon Musk’s space company, SpaceX, had offloaded its BTC assets.
The premier cryptocurrency touched a low of $24,711, leading to analogous slumps in related stocks, including Coinbase, Marathon Digital, and Riot Platforms.
The Wall Street Journal’s investigation revealed SpaceX’s complete sale of its Bitcoin assets after reducing the asset’s value for two successive years, 2021 and 2022. “SpaceX wrote down the value of Bitcoin it owns by a total of $373 million last year and in 2021 and has sold the cryptocurrency,” the WSJ reported.
While the exact Bitcoin sale amount remains under wraps, SpaceX’s financial records indicate a substantial spend of around $5.2 billion in 2022, covering land purchases, equipment, and research & development.
In 2021, Musk publicly shared that SpaceX held a specific Bitcoin amount, aligning with Tesla’s declaration to buy $1.5 billion in BTC. This move notably pushed BTC to a historic high of more than $43,000.
Tesla, another Musk enterprise, showed similar trends in its Bitcoin asset management. By mid-2023, Tesla’s financial records reflected a Bitcoin worth of merely $184 million, indicating a sale of nearly 75% of its original $1.5 billion investment.
Main Reason Behind The Bitcoin Crash
While the SpaceX Bitcoin sale garnered extensive media attention, the primary trigger for the price crash seems linked to the futures market. This market experienced its most significant futures liquidation since the rise of FTX, accumulating Bitcoin long liquidations of an impressive $386.68 million, as per Coinglass.
Crypto expert, Skew, commented on the sudden market change; “BTC Open Interest and Perp Delta: Well didn’t expect this so soon but very large rinse in OI here. Bybit OI around June levels & Binance Perp Delta hit highest sell delta since June local low. Wild.”
Ki Young Ju, the founder of CryptoQuant, shed light on the unusual BTC price on Coinbase: “BTC price premium on Coinbase up +3%. It’s either 1. Some whale entity dumped BTC on Binance or 2. Coinbase whales are buying the dip.”
Skew later suggested potential market strategies by big firms: “Considering the puke came from Coinbase spot, makes sense big firms would bid the pricing inefficiencies on Coinbase and then dump on Binance spot to profit that price difference. Market is in the big boy sandbox now.”
At the time of reporting, Bitcoin’s price was trading at $26477.58, down 7% in the last 24 hours. A rise above the 200-day EMA, ideally reaching the $28,400 mark, would be a hopeful sign for Bitcoin enthusiasts.