Elon & China: Possible Reasons For The Recent Market Panic
SpaceX dumps Bitcoin and China's property giant Evergrande declares bankruptcy. Markets panic as they fear a ripple effect.
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Cryptocurrency prices plunged late Thursday afternoon, with BTC dropping more than 7% to $25,600 within 10 minutes, its most significant one-day drop since the FTX collapse in November of 2022.
Analysts speculate that the selloff could have been triggered by a Wall Street Journal (WSJ) report revealing that SpaceX, Elon Musk’s space rocket company, sold off some or all of its Bitcoin holdings.
According to the WSJ, “documents also show SpaceX wrote down the value of bitcoin it owns by a total of $373 million last year and in 2021 and has sold the cryptocurrency.”
This event marked the most substantial liquidation since the FTX collapse, with crypto traders facing $1.04 billion in liquidations due to intense market volatility.
The timing of the SpaceX news coincided with fears of a ‘Lehman moment’ that could jeopardize China’s financial system. Yesterday, the Chinese property giant Evergrande Group declared bankruptcy in New York.
Over the last two years, Evergrande reported a $80 billion loss and accumulated liabilities exceeding $300 billion. News of Evergrande’s bankruptcy filing sent additional shockwaves through the crypto market.
Bitcoin dropped by over 6% in the last 24 hours, trading at $26,053 at the time of this writing.