Why is Bitcoin’s price dropping today? Some blame SpaceX and Elon Musk

Bitcoin investors are waking up to red screens today as the cryptocurrency plunges along with other cryptocurrencies across the board. As of the time of this writing, Bitcoin has fallen over 7.4% in the past 24 hours to just above $26,400 per coin. The token’s fall coincides with those of other cryptocurrencies such as Ethereum, Cardano, Solana, Dogecoin, Shiba Inu, and more. All those coins are down by a range of about 5% and 7% in the last 24 hours, too.

Bitcoin hasn’t seen lows this bad for nearly two and a half months. But what’s causing this crypto crash for Bitcoin in particular?

Many on social media are laying the blame on Elon Musk’s SpaceX. (August 24, 2023), The Wall Street Journal published a piece looking into the finances of SpaceX, and revealed that the company wrote down the value of its Bitcoin holdings by $373 million at some point. Because Bitcoin began dropping around the time of this news, some blamed SpaceX as the catalyst for the selloff.

Others, meanwhile, claimed news of China’s property giant Evergrande filing for bankruptcy was what spooked investors and caused a selloff.

But CoinDesk notes that professional traders have argued that neither event was the main catalyst for the drop in Bitcoin’s price. Instead, they say the most likely catalyst was that it was simply the result of a “long squeeze,” after an increasing glut of unsettled futures contracts in Bitcoin.

When Bitcoin fell below $28,500 (August 24, 2023), that essentially spooked some traders into liquidating their holdings. As CoinDesk notes, “as prices fall lower, long traders have to sell their positions to avoid getting liquidated – adding to increased selling pressure, but, at the same time, creating an endless loop of falling prices and long position covering.”

However, CoinDesk also notes that other factors likely played somewhat of a role in Bitcoin prices heading lower, including the rising interest rates in the United States and the uncertainty surrounding the Grayscale court ruling, which is expected today. That ruling will determine if the Securities and Exchange Commission was unreasonable when it denied cryptocurrency asset management company Grayscale its Bitcoin ETF.