Bitcoin fall wipes $44bn off market cap as volatility strikes crypto market

POLAND - 2023/07/06: In this photo illustration, the Bitcoin logo displayed on a smartphone with stock market percentages in the background. (Photo Illustration by Omar Marques/SOPA Images/LightRocket via Getty Images)
Bitcoin was trading as low as $25,409 on Friday. Photo: Omar Marques/SOPA Images/LightRocket via Getty Images

Bitcoin (BTC-USD) crashed to trade as low as $25,409 on Friday, wiping about $44bn off its market cap and leading a market-wide crypto fall.

The downward pressure came as news hit that Elon Musk's SpaceX had reportedly written down the value of its crypto holdings.

The company wrote down the value by $373m according to a report by The Wall Street Journal, citing internal financial documents. SpaceX also sold bitcoin at some stage in the last two years, according to the report. It didn't say how much was sold or when the sale occurred.

SpaceX is a private company therefore its financials are not readily available, although Musk said it had bitcoin on its balance sheet in 2021.

Some traders put the move down to market structure and liquidations as the price dropped below $28,500, amid a relatively illiquid market.

As prices dropped, long traders sold their positions in order to avoid being liquidated.

The move wiped around $44bn off the volatile cryptocurrency's market cap, before recovering somewhat to trade at around $26,400 by Friday morning European time, according to data from CoinMarketCap.

Read more: LIVE: FTSE and pound pull back amid lacklustre retail sales data

The moves come amid a torrid time in regulation for crypto. In recent months the US's top financial regulator has moved to investigate crypto exchanges Binance.US and Coinbase, two of the largest companies in the space. The businesses face claims that they sold unregistered securities to the public.

Crypto is also sensitive to macroeconomic changes. With high inflation and interest rate rises on the slate around the world, traders have taken money off the table.

Watch: Could China shut-down the Bitcoin network? | The Crypto Mile