Bitcoin experienced a fresh two-month low as global markets faced a wave of risk aversion. The digital currency fell 7.2% on Thursday, marking its largest single-day decline since November 2022. It dropped to $26,172, its lowest level since June 16, before partially recovering to $26,441 by 0835 GMT, a decrease of 0.8% for the day.
This decline in the crypto market is attributed to a combination of factors, including concerns about China’s economy, fears of prolonged higher U.S. interest rates, and a report suggesting that Elon Musk’s SpaceX sold its bitcoin holdings.
Ether, the second-largest cryptocurrency, also experienced a sharp drop on Thursday, though it remained steady at $1,685.20.
Analysts believe that while the immediate trigger might be the SpaceX report, the broader reason for the sell-off is the overall risk-off sentiment prevailing across various asset classes. Additionally, low volatility and reduced retail investor enthusiasm are contributing to the current price movement.
Bitcoin’s value had been hovering around $30,000 recently, having slowly recovered from its significant drop in 2022. The cryptocurrency market received a boost in June when BlackRock applied to launch a spot bitcoin exchange-traded fund (ETF) in the United States. Some investors interpreted this move as an optimistic sign for the approval of similar ETF applications by the U.S. Securities and Exchange Commission.