This week, Bitcoin price dropped below $26,000 due to decreased market activity, the crisis in China’s property sector, and reports of SpaceX selling some of its bitcoin holdings.
Heightened Price Volatility On Decreased Trading Volume
The report by Glassnode and Cryptofirm Coinshares on September 8 warned of the low levels of apathy and scepticism in the Bitcoin markets. This has been followed by a decrease in trading volume on trusted exchanges, resulting in increased volatility of Bitcoin prices.
TradingView
CoinShares reported that Bitcoin traders had made bets worth $1 billion over the past 24 hour period.
Did Elon Musk Have Something To Do With Bitcoin’s Drop?
The Wall Street Journal reported that SpaceX sold its crypto assets after reducing their bitcoin holdings from $373 million to $373 millions. Past tweets from Tesla CEO Elon Musk have impacted the prices of cryptocurrencies, particularly meme coins. As such, investors were warned to be cautious of his movements.
Is Bitcoin Still a Risk-on Asset?
The Evergrande Group filing for bankruptcy has impacted Bitcoin and other crypto assets as they are often considered a risky investment in times of uncertainty. However, Bitcoin could benefit from a full-blown financial crisis. PrimeXBT explained that “while we consider a full financial meltdown unlikely, should it transpire, it might bolster Bitcoin, especially if the repercussions permeate the broader financial sector”.
Coinbase’s regulatory approval for offering crypto futures trading in the US was a bright spot for the crypto markets this week. However, the approval of an ETF for spot bitcoin, notably BlackRock’s (BLK), might not come as soon as initially anticipated.
TAKEAWAYS KEY
- The Bitcoin price is more susceptible to wild price swings due to decreased trading volume.
- SpaceX, founded by Elon Musk, sold a portion of its bitcoin holdings.
- China’s property market problems could indicate Bitcoin is still viewed as a risk-on asset.
