Bitcoin falls below $26,000 as risk-averse investors abandon it

Bitcoin (BTC) underwent a significant drop and fell below $26,000 for the first time in two months as investors increasingly turned risk-averse and global government bond yields reached their peaks in about 15 years.

“When you throw in what is happening in the bond market, it becomes easy for Bitcoin prices to soften,” Edward Moya, Senior Market Analyst at Oanda, was quoted as saying in a note. This huge crash has almost undone all the gains BTC made as a reaction to BlackRock’s surprise filing for a Bitcoin ETF on June 15.

Bitcoin has fallen by roughly 9% since the end of March after increasing by 72% in the first quarter. Last year, the token declined 64% amid a series of industry scandals and bankruptcies, reports indicated.

The increase in global yields comes as resilient economic data challenges the view that central banks rates are peaking. Higher interest rates usually make alternative investments such as cryptocurrencies less desirable.

After Elon Musk's SpaceX allegedly sold cryptos for over $373 million, the Bitcoin crash got worse.

As per the Wall Street Journal report on August 17, the aerospace company held approximately $373 million worth of BTC on its financial records throughout the years 2021 and 2022. While neither SpaceX or Elon Musk have made any comment about this BTC offload, this move signifies a strategic shift in the company’s financial portfolio.

In 2021, Musk said that SpaceX had made a BTC purchase of an unspecified amount. In the same year, in a filing with the US Securities and Exchange Commission disclosed that Tesla had plans to purchase $1.5 billion worth of the cryptocurrency. This saw Bitcoin surge to an all-time high of over $43,000 in the year.         

Bitcoin has recovered a bit since yesterday's dump, currently trading around $26,615, with a 24-hour trading volume of $30,978,060,365, according to data from Coinmarket.

Regardless of the events of yesterday, BTC continues to sit at the top position on CoinMarketCap with a live market cap of $5oo billion.