Cryptocurrencies dragged the stock market downward on a day that highlighted the influence of Elon Musk. In just a few minutes, Bitcoin dropped about 7%, sinking to around 26,311 points, a level not seen since July. Ether and BNB also slipped nearly 6%, while XRP suffered the hardest hit at a 14.02% decline following regulators in the United States indicating steps to challenge the Ripple Labs lawsuit, affecting perceptions of the coin’s value. The downturn appeared to align with early reporting from The Wall Street Journal. SpaceX, the private aerospace company owned by Musk, reportedly sold Bitcoin reserves between 2022 and 2021, totaling about 373 million dollars. The timing of Musk’s actions remains unclear.
The trend is not limited to a single asset. The owner of Twitter and Tesla has shown a volatile pattern with Bitcoin, according to Tesla’s 2023 earnings report. The company reduced its Bitcoin holdings to 184 million dollars during the second quarter. A year earlier, Tesla reportedly liquidated more than 30,000 Bitcoins valued at 936 million dollars, erasing a large portion of its original stake. The market was surprised after two years of aggressive bets on cryptocurrency, especially in relation to Tesla. Early 2021 saw the company declare an investment of 1.5 billion dollars in Bitcoin and a plan to accept the currency for car payments, but the plan was paused four months later, in May, citing market sustainability concerns.
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Elon Musk, widely recognized as one of the richest people on the planet, has caused notable fluctuations in cryptocurrency prices. Before moving forward, a group of Dogecoin investors filed a lawsuit in June 2022 accusing him of manipulating prices. The complaint, amounting to 258 billion dollars, alleges that Musk replaced the Twitter logo with a dogecoin motif, spurred a 30% increase in value, and sold more than 124 million units while repurposing the network’s branding. This controversy contributed to a dip in Dogecoin. Earlier, when Musk hinted at Bitcoin payments for cars, the reference currency surged above 13% to around 43,700 dollars.
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However, the games played with digital currencies also took a toll on balances. The sector’s value sagged after scandals linked to the FTX collapse and the bankruptcy of major players in the crypto world, leading to a broad decline. Tesla faced a gross loss of about 204 million dollars on its 2022 Bitcoin investment and subsequently sold much of its digital holdings.
Those red numbers followed a period of six months of uneven recovery, during which Bitcoin and the broader crypto market even flirted with the 30,000 level in July. In 2022 the cryptocurrency market faced a loss of roughly 2 trillion dollars, and the reference asset declined by more than 60% on the stock market. Yet investor sentiment remained mixed. A recent report from a major crypto player noted a 30% rise in total market capitalization in the first half of the year, reaching about 1.17 trillion euros. Bitcoin transaction volume reportedly increased by 185% year over year, with network activity up 58%. The U.S. authorities continue to scrutinize major firms in the sector, with lawsuits involving Binance and Coinbase over alleged embezzlement and unregistered exchange operations. Attribution: The Wall Street Journal and independent market analyses.