The price of bitcoin has dropped nearly 9% since early Thursday as part of a broader sell-off of risky assets. A report that Elon Musk’s Space X had dumped the cryptocurrency stoked investors’ fears.
According to CoinGlass, a cryptocurrency trading platform, $1 billion has been drained from cryptocurrencies over the past 24 hours — with bitcoin accounting for nearly half of that loss.
The world’s most valuable cryptocurrency was trading at $26,327 early Friday, 16% below its peak this year in early July, according to data from CoinMarketCap.
Thursday’s sell-off, which hit stock markets as well as traditionally safer bets like government bonds, came after officials at the US Federal Reserve expressed concern that inflation “remained unacceptably high,” signaling that another rate hike could be in the cards.
The Wall Street Journal reported Thursday that SpaceX had written down the value of bitcoin it owns by a total of $373 million last year and in 2021, and had sold the cryptocurrency.
The report sparked “a panicked reaction in the crypto market,” Hani Abuagla, senior market analyst at online broker XTB, said in a Friday note.
Space X did not immediately respond to CNN’s request for comment.
Musk has been a vocal proponent of bitcoin, announcing in early 2021 that his Tesla
(TSLA) would accept payment in the cryptocurrency, though he later ditched those plans. Tesla
(TSLA) also dumped a big chunk of its own bitcoin holdings last year.
The crypto market has faced pressure from US regulators in recent months. In June, the Securities and Exchange Commission sued Coinbase the world’s largest crypto exchange, alleging that it is acting as an unregistered broker. Coinbase has denied the allegations.
The company caught a break this week when it won a crucial regulatory approval that will allow the platform to offer US-based investors access to crypto derivatives, which account for about 75% of global crypto trades.