Why Bitcoin tanked last week

TL;DR

• Bitcoin started at around $29.5k last week and reached just $25.8k on Thursday afternoon, and there are a few theories as to why.

• Unnamed ‘experts’ told Decrypt: “Much of it has to do with the broader economy, including US regulation and uncertain institutional investors”

• Some believe the crash was triggered after a Wall Street Journal report alleged that Elon Musk’s SpaceX wrote down the value of his Bitcoin holdings.

• Others point to the fact that China’s Evergrande Group (aka the backbone of China’s housing market) has filed for Chapter 15 bankruptcy protection in New York.

• Here’s your daily dose of hopium: This sudden drop in price isn’t great – but Bitcoin is still up $10k (or about 60%) this year.

Full story

In case you missed it:

Last Friday we wrote an entire article about how Bitcoin had become less volatile (in price) than oil.

…just for the price of Bitcoin tanking erratically 20 minutes before we hit “schedule email.”

(“When you make plans, God laughs” and all that…)

So what the hell happened?

How did Bitcoin start around $29.5k last week and reach as low as $25.8k by Thursday afternoon?

No one can say for sure, but we have listed the three most common theories for you.

We’ve broken them down into “boring and logical,” “outrageous miscommunication,” and “a problem bigger than crypto.”

1. Boring and logical:

   Unnamed ‘experts’ told Decrypt:

   “Much of it has to do with the wider economy, including US regulation and insecure institutional investors”

   That, and less money floating around in space.

2. Scandalous miscommunication:

   The crash was triggered after a Wall Street Journal report alleged that Elon Musk’s SpaceX wrote down the value of his Bitcoin holdings.

   Which then led to a number of headlines claiming that SpaceX had liquidated its company whole Bitcoin possession.

   Write off = to report that something has lost value.

   Liquidate = sell stuff.

   Two very different things!

3. A problem bigger than crypto:

   China’s Evergrande Group (aka the backbone of China’s housing market) has filed for Chapter 15 bankruptcy protection in New York.

   That’s not a rumor, that actually happened.

   Whether all this is the reason for the BTC crash?

   We have no idea.

This is your daily dose of hopium:

This sudden drop in price isn’t great – but Bitcoin is still up $10,000 (or about 60%) this year.

Not bad for a bear market!