A worsening macroeconomic climate and the collapse of industry giants such as FTX and Terra have weighed on bitcoin’s price this year.
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Cryptocurrency prices remained under pressure to end the week.
Bitcoin was last lower by almost 7% at $25,990.63, according to Coin Metrics, following a stunning fall late Thursday, when it dropped to as low as $25,533.70.
The move pulled the rest of the crypto market lower. Ether, Binance coin and Cardano’s ada token were each lower by about 4% Friday. Ripple’s XRP slid 12% and the Solana token lost 6%.
For the week, bitcoin is down more than 10% and on pace for its seventh weekly loss in the past eight and its worst week since mid-May. Coin Metrics measures a week in crypto, which trades 24 hours a day, from the 4:00 p.m. ET stock market close one Friday to the next.
Crypto was under pressure throughout Thursday but dropped sharply around 6 p.m. ET., following a report in The Wall Street Journal that Elon Musk’s SpaceX wrote down the value of its bitcoin holdings by $373 million last year and in 2021, and sold the cryptocurrency.
Bitcoin heads for its worst week since May
“The selloff appears to largely have been fear-induced on the back of headlines that SpaceX sold off Bitcoin assets,” said Darius Tabatabai, co-founder at decentralized exchange Vertex Protocol. “No proof has emerged that happened, and thin summer liquidity led to prices gapping dramatically downward, causing cascading liquidations in derivatives markets, further amplifying the drop similarly to how we’ve seen selloffs occur in panic selling episodes.”
“Currently, we’re seeing negative funding rates for perpetual futures, which can portend bearish momentum for the time being, but in this case it could very well turn on a dime, given the speed and violence of the move,” Tabatabai added.
Bitcoin has been stagnant for much of the third quarter, a historically weak one for the cryptocurrency. It’s now off 14% for the quarter and about 11% for August. Despite recent softness in the market even ahead of this week’s dramatic slide, bitcoin is still up about 56% in 2023.
—CNBC’s Nick Wells contributed reporting.