In recent news, the price of bitcoin has dropped by approximately 10% following the revelation that SpaceX, led by Elon Musk, sold the cryptocurrency. The Wall Street Journal reported that SpaceX wrote down the value of its bitcoin holdings by $373 million in 2021 and 2022, leading to the sale of the crypto. This write-down coincides with a significant decrease in bitcoin's price, which experienced a crash in late 2021 and has struggled to recover throughout 2022.
Tesla, another company associated with Musk, also made similar moves with bitcoin. Last year, Tesla announced that it had sold most of its bitcoin holdings after acquiring them in 2021. The recent drop in bitcoin's price occurred after the Wall Street Journal report, causing the cryptocurrency to fall by 8% to around $26,500. It has since declined further to approximately $26,200. Over the past week, the price of bitcoin has decreased by 11%, reaching levels last seen in mid-June.
Furthermore, the rise in bond yields, which have reached their highest level since 2007, has contributed to the decline in risk assets, including cryptocurrencies. This increase in yields is a result of indications that the Federal Reserve remains hawkish on rates. Prior to this recent drop, bitcoin had been trading within a sideways range for several months, with investors hoping for the potential approval of a spot bitcoin exchange-traded fund (ETF) by the SEC. Notably, the SEC has yet to indicate any imminent approval and has recently postponed action on various bitcoin ETF applications.
Overall, with the sale of bitcoin by SpaceX and the associated write-down of its value, along with the ongoing decline in bitcoin's price, it is clear that the cryptocurrency market is currently facing challenges. The increase in bond yields has further impacted risk assets, including crypto. Despite hopes for a potential bitcoin ETF approval, the SEC has not provided any indication of imminent approval and has delayed action on related applications. As a result, the future of bitcoin and the broader cryptocurrency market remain uncertain.