Bitcoin (BTC) suffered a major crash and slumped below $26,000 for the first time in two months as investors increasingly turn risk-averse and global government bond yields reach their peaks in about 15 years, various media reports indicated.
“When you throw in what is happening in the bond market, it becomes easy for Bitcoin prices to soften,” Edward Moya, senior market analyst at Oanda, was quoted as saying in a note. This huge crash has almost undone all the gains BTC made as a reaction to BlackRock’s surprise filing for a Bitcoin ETF on June 15.
After surging 72 percent in the first quarter, Bitcoin has declined about 9 percent since the end of March. The token tumbled 64 percent last year amid a series of industry scandals and bankruptcies, reports indicated.
Also Read: US Treasury yields lift, Wall Street slips as rates, China loom large
The Musk effect
The rise in global yields comes as resilient economic data challenges the view that central banks rates are peaking. Higher interest rates usually make alternative investments such as cryptocurrencies less desirable.
The crash in Bitcoin exacerbated further after Elon Musk's SpaceX reportedly dumped cryptos worth nearly $373 million, which it had acquired between 2021 and 2022.
Also Read: Gold at 5-month low as higher yields, rate-hike bets dominate mood
According to an August 17 Wall Street Journal report, the aerospace giant had roughly $373 million of BTC holdings on its balance sheet across 2021 and 2022. While neither SpaceX or Elon Musk have made any comment about this BTC offload, this move signifies a strategic shift in the company’s financial portfolio.
Musk had announced in 2021 that SpaceX had made BTC purchase of an unspecified amount and, in the same year, disclosed in a filing with the US Securities and Exchange Commission that Tesla had plans to purchase $1.5 billion worth of the cryptocurrency. This saw Bitcoin surge to an all-time high of over $43,000 in the year.
Bitcoin has recovered a bit since today's dump, currently trading around $26,615, with a 24-hour trading volume of $30,978,060,365, according to data from Coinmarket.
Regardless of the events of today, BTC continues to sit at the top position on CoinMarketCap with a live market cap of $5oo billion.
