The Explanation of SpaceX's Secretive $153 Million Cryptocurrency Transaction
SpaceX, the private aerospace company founded by Elon Musk in 2002, has consolidated its Bitcoin holdings, marking a significant move in the company's involvement with cryptocurrency. In July 2021, SpaceX first disclosed its Bitcoin holdings, making it one of the largest corporate Bitcoin holders.
The consolidation involved withdrawing Bitcoin from 16 Pay-to-Public-Key-Hash (P2PKH) addresses and consolidating it into a single SegWit-compatible Pay-to-Witness-Public-Key-Hash (P2WPKH) address. At the time of publication, the funds remained in this single address, valued at approximately $815 million.
This Bitcoin movement by SpaceX was concurrent with Tesla's, another Musk-led company that purchased $1.5 billion in Bitcoin in 2021 and briefly accepted BTC for payments. Venture capitalist Chamath Palihapitiya stated in a 2024 podcast that SpaceX also utilizes stablecoins for Starlink payments, bypassing traditional banking rails.
However, SpaceX's cryptocurrency endeavours have not been without controversy. In early June 2021, reports indicated that the US President Donald Trump administration considered reviewing or canceling approximately $22 billion in SpaceX contracts due to a dispute between Trump and Musk. This dispute reportedly stemmed from the Golden Dome, a $175 billion initiative aimed at building a space-based network of satellites for threat detection and tracking.
While most contracts were deemed critical to US interests, the situation underscored growing political tension and raised questions regarding SpaceX's standing with the US government. Concerns about "over-reliance on SpaceX" reportedly prompted the Trump administration to open bids to other providers. The Pentagon has since decided to diversify partners for the Golden Dome missile defense system, with the intention to prevent the Golden Dome from depending solely on SpaceX.
Elon Musk's involvement with crypto has varied since the 2021 Bitcoin bull run. The Bitcoin purchase by SpaceX aligned with Musk's strategy to diversify company assets and support cryptocurrency adoption. However, Musk has been known to express his opinions on cryptocurrencies, often causing market fluctuations. Neither SpaceX nor Musk has commented on the recent transfer.
The consolidation of SpaceX's Bitcoin holdings occurs as the company navigates increased political uncertainty. The company is estimated to hold approximately 6,977 BTC, valued at about $815 million. This consolidation may indicate a long-term commitment to cryptocurrency by SpaceX, despite the political challenges it faces.
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