👋 Hi finance enthusiasts and fellow investors!
What a crazy last night. Bitcoin lost -7.7% of its price and the market cap fell 6.3% in the last 24 hours. In total, $4 billion of open interest was wiped out! Crazy numbers - we haven't seen anything like this since the 2021 low.
Today we will cover the 3 reasons for the price dump and how you can use that for your advantage.
3 Reasons for the Dump
What happened happened, but you'll probably want to know why! I found three possible reasons.
Did Elon Musk sold Bitcoin?
Yesterday the news came out that Space X had allegedly sold its BTC. That's what every beginner thinks, the news fits perfectly, doesn't it?
But it doesn't quite add up. Let me explain:
1. There is no evidence to support the claim that SpaceX sold all it’s Bitcoin. The WSJ report is unclear and provides no evidence of the actual sale.
2. Furthermore, the article states that SpaceX has written down the value of the bitcoin it owns by $373 million in the last year and in 2021. Not now!
So I don't think it's the main reason. Let me share the other two factors.
Grayscale ETF
The possible conversion of Grayscale into an ETF could also be a reason. As mentioned already, all Bitcoin Spot ETFs except this one are bullish. You might ask why: This is due to the risk-free arbitrage of long GBTC and short BTC. Maybe that’s what were seeing currently! Possible, but speculation.
Evergrande Bankruptcy
Property giant Evergrande has filed for bankruptcy protection in the US as the real estate crisis in China deepens. I think it plays a bigger role then some people might think. This is big news and stocks have been sold off because of it, especially after the close!
Now what is my opinion? I think todays drop was mainly due to China economic news around the Evergande bankcruptcy & U.S. stock markets bearish pressure on risk assets. Also the other two facts will play a role, because in the end it’s always a chain reaction of multiple events.
But let's talk about the most important part. What should you do now?
📣 CryptoExplorer AI
Last week we opened the alpha version for the first participants. Over the next few weeks we are slowly adding more people. Make sure you join the Telegram channel we use as a waiting list!
What now?
I can't tell you what you should do, but I for one have used this price dip to buy more. If you DCA, you can manually buy a little more after price dumps like today.
So yes, I bought the dip with my CE Pro portfolio, which is accessible to all CryptoExplorer Pro members! Price drops like this are the perfect opportunity if nothing has changed in your long-term conviction.
Do you have any questions? Let me know by simply replying to this email or by replying to Substack with a comment.
I hope you have a great weekend and, as always, don't let a little price dump spoil it!
Cheers,
Stefan
Co-Founder CryptoExplorer
Thanks for the explanation!