For the second week in a row, billionaire Elon Musk's tweets have ruled the crypto market.
After explaining that the company hasn't sold any Bitcoin assets, Tesla Inc. CEO Elon Musk drove Bitcoin back above $45,000 on Monday. It's the latest tweet to cause price swings in the sector and feed curiosity about why the electric-car pioneer is tweeting crypto updates every day.
“He needs to wake up to the fact that with his following, even single-worded tweets can influence markets,” Antoni Trenchev, managing partner and co-founder of Nexo, a crypto lender in London, said.
The controversy began on Sunday, when Musk published a tweet that sparked speculation that Tesla had already sold its shareholding. “With the amount of abuse @elonmusk is getting, I wouldn't blame him,” said @CryptoWhale, who guessed that Tesla had already sold its stock. Musk responded to the tweet with a single word: "Indeed."
It was enough to upset traders' confidence, and Bitcoin dropped 10% over the weekend, hitting a new three-month low. Prices were stable on Monday, rising 3% to $45,436 at 11:12 a.m. in London.
In the Bitcoin Universe, Elon Musk Reopens an Old Wound
Musk's involvement in cryptocurrency has been a major driver of the bull market this year, and Tesla's $1.5 billion holding has given virtual currencies legitimacy. Tesla's earnings report from April revealed that the corporation had liquidated 10% of its Bitcoin holdings. Tesla is attempting to “prove liquidity of Bitcoin as an alternative to holding cash on the balance sheet,” Musk stated on Twitter.
Traders and Tesla analysts have speculated aloud as to whether Musk's internet comments are serious. Musk has tweeted about cryptocurrency eight times in the last two days, typically with emojis in response to jokes from his followers in between tweets about SpaceX and China's Mars mission. Musk responded to a discussion questioning his Bitcoin stance with the following: “Obnoxious threads Like this, I'm tempted to invest heavily in Doge.
In a report, Chris Weston, head of research at Pepperstone Group Ltd., stated that Musk appeared to be “taking on all comers on Twitter over the weekend and causing some hefty gyrations across the coins.”
Musk surprised crypto investors last week when he published a piece condemning Bitcoin as an energy hog. Tesla would stop selling cars using the currency, he said, and he dubbed current consumption trends "crazy." Investors have questioned Musk's timing, claiming that Bitcoin mining consumes a significant amount of energy.
Both Main Street and Wall Street are being swept by Bitcoin and crypto-assets.
“Elon Musk's actions have clearly damaged his reputation with both traditional and digital asset investors,” said Vladimir Vishnevskiy, co-founder of St. Gotthard Fund Management, which invests in both crypto and traditional assets. “He demonstrated his unpredictable temperament once more.”
Post a Comment