Bitcoin price plunges to two-month low amid $1 billion crypto sell-off – after Elon Musk’s SpaceX sells of $373 MILLION in digital currency holdings

Bitcoin’s price is down 9 percent — to a two-month low — after reports that Elon Musk’s SpaceX dumped the cryptocurrency.

According to data from digital currency specialist CoinDesk, the world’s most popular cryptocurrency fell below $25,500 per virtual coin on Thursday evening – its lowest level since mid-June.

The sharp drop coincided with reports that SpaceX had written down the value of Bitcoin it holds by a total of $373 million last year and throughout 2021 and sold its holdings in the cryptocurrency.

According to trading platform CoinGlass, $1 billion worth of cryptocurrencies have been withdrawn in the past 24 hours, with Bitcoin accounting for nearly half of that loss.

It comes as global markets have been hit by a broader sell-off of risky assets amid growing concerns about China’s economy, after real estate giant Evergrande filed for bankruptcy protection in the US last night.

The sharp drop coincided with reports that SpaceX, owned by billionaire Elon Musk, had written off the value of the Bitcoin it owns by a total of $373 million last year through 2021.

Investors also fear another rate hike is imminent after the Federal Reserve raised concerns that inflation remains “unacceptably high” and retail sales were a sign of a resilient economy.

The SpaceX report in The Wall Street Journal caused panic in the crypto market and was the “immediate catalyst” for Bitcoin’s sell-off, according to Ben Laidler, global market strategist at eToro.

“The broader driver is that crypto assets are not immune to the increasing risk-off-sell pressures seen across asset classes,” he said.

Musk was an outspoken supporter of the digital currency, announcing in 2021 that Tesla would accept Bitcoin as payment for its cars.

He eventually reneged on this promise, however, and it was revealed that the electric car company had unloaded most of its holdings — about $2 billion — into the cryptocurrency last year.

Tesla said it bought traditional currency with the $936 million from its Bitcoin sales.

Although Bitcoin recovered slightly this morning and traded around $26,327 early Friday, it is still down nearly 20 percent from a high of over $31,000 in July.

The currency has hovered near $30,000 in recent months and gradually recovered this year after a sharp fall in 2022 as several companies collapsed, causing huge losses for investors.

Cryptocurrency Ethereum, the second largest by market capitalization, was also hit by investor fears, falling below $1,600 on Thursday before regaining some losses to trade about 6 percent today to $1,682.

The market has faced a crackdown from regulators in recent months following the collapse of FTX in 2022.

Last week, disgraced FTX founder Sam Bankman-Fried had his $250 million bail revoked after allegedly leaking letters from a key witness.

Bitcoin’s fall comes amid a broader sell-off in global financial markets

The market has faced a crackdown from regulators in recent months following the collapse of FTX in 2022. Pictured: Founder Sam Bankman-Fried

In June, the Securities and Exchange Commission sued Binance, the world’s largest cryptocurrency exchange, for allegedly operating an illegal exchange in the US and misusing billions of dollars. The company denied the allegations.

Later that month, the regulator also accused exchange Coinbase of violating securities laws.

The lawsuit alleges that Coinbase has made billions of dollars since 2019 by unlawfully facilitating the buying and selling of crypto assets and exposing investors to “significant risk.”

This week, however, the company won a crucial regulatory approval allowing it to offer Bitcoin and futures trading to eligible clients in the US, sending shares up 3 percent. Previously, only institutional clients could trade the products.

“This is a critical milestone that reaffirms our commitment to running a regulated and compliant business,” said Coinbase.