Bitcoin reached a new two-month low on Friday, breaking out of its current tight range as a wave of risk aversion surged across global markets.
Bitcoin plummeted 7.2% on Thursday, its worst one-day decrease since November 2022, when leading exchange FTX failed.
During Asian trading hours on Friday, it fell to a two-month low of $26,172, its lowest since June 16. It had somewhat recovered by 0835 GMT to $26,441, down 0.8% on the day.
the fuck was that? pic.twitter.com/Lh2zGXv29n
— Molly White (@molly0xFFF) August 17, 2023
Global markets have been rocked by a wave of selling, with Wall Street’s main indexes finishing down on Thursday and Asian equities set for a third week of losses due to concerns about China’s economy and expectations that interest rates in the United States would remain higher for longer given the country’s solid growth.
Ether, the second largest cryptocurrency, was unchanged at $1,685.20 after falling dramatically on Thursday.
Read more: Top 10 Cryptocurrencies Of 2023
Some experts blamed the dip on a Wall Street Journal story that Elon Musk’s SpaceX liquidated its bitcoin assets after writing down the value by $373 million. Musk is well-liked by cryptocurrency aficionados, and bitcoin prices have historically risen in response to his tweets.
According to Ben Laidler, global markets analyst at eToro, the SpaceX news was the “immediate catalyst” for bitcoin’s sell-off.
“The broader driver is that crypto assets are not immune to the deepening risk-off selling pressure that is being seen across all asset classes,” Laidler noted.
Enigma Securities’ head of research, Joseph Edwards, ascribed the bitcoin price rise to low volatility and a lack of excitement among regular investors.
Bitcoin has been hanging at $30,000 in recent months, having steadily rebounded this year after plummeting drastically in 2022 when several crypto businesses failed, leaving investors with substantial losses.
BlackRock’s application to create a spot bitcoin exchange-traded fund (ETF) in the United States buoyed crypto markets in June. Some investors viewed Grayscale’s move as a sign that the Securities and Exchange Commission will approve spot bitcoin ETF applications from multiple asset managers, including Grayscale.
“The big worry right now is that this could be a frontrun on the outcome of Grayscale’s lawsuit against the SEC; optimism on that front has kept markets inflated above what they might otherwise be for much of the summer,” Edwards said.
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