Wednesday, February 28, 2024
Blockchain

SpaceX dropping $373M worth of Bitcoin led to crypto market crash

SpaceX, the renowned aerospace technology firm, reportedly wrote down the value of its Bitcoin holdings by a total of $373 million in 2021 and 2022, according to an Aug. 17 report by The Wall Street Journal. The report suggests that SpaceX may have sold its entire Bitcoin stash, although it remains unconfirmed whether the entire $373 million worth of Bitcoin was liquidated.

The Wall Street Journal, after reviewing the firm’s financial documents, reported that SpaceX’s expenses amounted to roughly $5.2 billion in 2022. Additionally, the company spent $5.4 billion in 2021 and 2022 on acquiring property, equipment, and research and development.

Elon Musk, the CEO of SpaceX, had publicly announced in 2021 that the firm had acquired a certain amount of Bitcoin. This announcement followed a U.S. Securities and Exchange Commission filing that revealed Tesla, another Musk co-founded company, had plans to purchase $1.5 billion of the cryptocurrency. This move likely played a role in Bitcoin reaching a then-record price of over $43,000.

Tesla’s second-quarter 2023 earnings report indicated that the company had sold all but $184 million of its Bitcoin holdings. Specifically, Tesla liquidated over 30,000 BTC in the second quarter of 2022, amounting to approximately $936 million, which is roughly 75% of its initial $1.5 billion Bitcoin investment.

After the publishing of the news, the price of Bitcoin experienced a significant drop of around 10% within 10 minutes, causing the cryptocurrency’s value to fall to $25,166 on Binance. The OKX perpectual bitcoin price even plunged to $24,098. This price drop has been attributed by some in the Twitter community to reports of SpaceX’s Bitcoin write-down and potential sale. Others have linked the decline to external factors, such as China’s Evergrande Group filing for Chapter 11 bankruptcy in New York and apparent bearish pattern in technical analysis of bitcoin price.

Image source: Shutterstock

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