Bitcoin drops amid market volatility

The downward pressure came as news hit that Elon Musk’s SpaceX had reportedly written down the value of its crypto holdings

Bitcoin (BTC-USD) slipped to trade as low as $25,409 on Friday, wiping nearly $44 billion off its market capitalisation and leading a market-wide crypto decline.

The downward pressure came as news hit that Elon Musk’s SpaceX had reportedly written down the value of its crypto holdings.

The firm wrote down the value by $373 million as per a report by The Wall Street Journal, citing internal financial documents. SpaceX also sold bitcoin at some stage in the last two years, as per the report. It did not say how much was sold or when the sale took place.

SpaceX is a private firm therefore its financials are not readily available, although Musk said it had bitcoin on its balance sheet in 2021.

Some traders put the move down to market structure and liquidations as the price declined below $28,500, amid a comparatively illiquid market.

As prices decline, long traders sold their positions in order to avoid being liquidated.

The move wiped nearly $44 billion off the volatile crypto currency’s market cap, before recuperating somewhat to change hands at nearly $26,400 by Friday morning European time, as per data from CoinMarketCap.

The moves come amid a torrid time in crypto regulation. In recent months the US’ top financial regulator has moved to probe crypto exchanges Binance.US and Coinbase, two of the biggest firms in the space. The regulator has alleged that the businesses sold unregistered securities to the public.

Crypto is also sensitive to macroeconomic changes. With high inflation and interest rate hikes on the table around the world, traders have taken money off the table.