The FUD Around Bitcoin Escalates Amid Amateurish Takes and the Imminent Ruling on Grayscale’s Lawsuit Against the SEC

18.08.2023 - 17:33 / wccftech.com

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

At a time when global risk assets are bleeding due to an unholy convergence of China’s epic economic slowdown and resurgent inflation expectations across key markets on the back of crude oil’s inexorable rise, playing an important role in ramping up the yields in the US, Bitcoin tumbled to multi-month lows yesterday as an article by the Wall Street Journal was wrongly interpreted by trigger-happy traders. Of course, a key ruling that can shape the future of the cryptocurrency industry in the US is also adding to this recent bout of volatility.

Wall Street Journal published an article on SpaceX yesterday. Unfortunately, the post’s Bitcoin-focused content was wrongly interpreted by a host of traders, not helped by the relatively vague language employed within the article. The passage read:

“The documents also show SpaceX wrote down the value of bitcoin it owns by a total of $373 million last year and in 2021 and has sold the cryptocurrency. Tesla has taken a similar approach with its bitcoin holdings.”

BREAKING: Elon Musk’s SpaceX sold all its $373 million #bitcoin - WSJ

— Bitcoin Magazine (@BitcoinMagazine) August 17, 2023

Some traders interpreted this passage as an indication that SpaceX had sold the entirety of its Bitcoin stash. However, a careful perusal of the passage reveals that SpaceX marked down the value of its Bitcoin stash in 2021 and 2022, having sold a part of the original hoard. The passage never says that SpaceX no longer holds any Bitcoin. What’s more, this information pertains to 2022 and, as such, should have no bearing on the current pricing environment.

We are unable to confirm reports that SpaceX sold $373 Million worth of #Bitcoin

The report by WSJ is unclear and states, "SpaceX wrote down the value of #Bitcoin it owns by a total of $373 million last year and in 2021 and has sold the cryptocurrency."

As of now, there is no… pic.twitter.com/75EcdLzBzS

— Watcher.Guru (@WatcherGuru) August 17, 2023

While some X accounts tried to curtail the damage, the FUD did have a significant impact, prompting Bitcoin to fall to the $25,000 price handle.

Our readers would remember that Grayscale has been diligently trying to convert its Bitcoin Trust into a Spot ETF for quite some time. A spot Bitcoin ETF will make it extremely convenient for investors to acquire exposure to Bitcoin without the pitfalls associated with futures-based ETFs. It would also rectify the recurring deviation of the trust’s NAV from Bitcoin’s price, prompted by the fact that the trust is not allowed to redeem units. This means that when the trust’s NAV trades at a discount to Bitcoin’s spot