Elon Musk seems to the one-man controlling the crypto market with his tweets deciding the fate of the cryptourrency. The Tesla CEO’s latest tweet, that too, a meme about a couple breaking up over the male partner quoting Linkin Park lyrics, with the hashtag #Bitcoin and a broken heart emoji sent the bitcoin plunging once again.
According to data from Coin Metrics, bitcoin fell nearly 6% to $36,432, with other cryptocurrencies following suite – ether plunged 7% to $2,600 and dogecoin fell 8% to 36 cents. The popular bitcoin has had a fairly turbulent year after reaching an all-time high of more than $64,000 in April, then falling to nearly a half of gains to $30,000 in May.
Musk’s recent tweets have sparked a mix of ebullience, confusion, apprehension and dread in the crypto community. His social media missives, especially his tweets, have had significant influence on the prices of dogecoin and bitcoin. The billionaire is partly blamed for the extant slump in bitcoin and the broader crypto complex. And the media has described him as a something of an unofficial crypto financial adviser/internet troll, moving markets with memes, investment calls, and business announcements like Tesla’s initial proclamation that they would accept bitcoin for purchases.
— Elon Musk (@elonmusk) June 4, 2021
While Musk certainly is not claiming to be an official financial adviser, in this era of meme stock investors and NFT millionaires, there are clearly a lot of people who listen to him! A good example is May 8, when Musk made his Saturday Night Live debut. His appearance and comments on the show sent dogecoin plunging when he called it a “hustle”.
But his tweets, memes and irresponsible statements about cryptocurrency, especially Bitcoin, is having a negative impact in the market. Nikolaos Panigirtzoglou, JP Morgan strategist and bitcoin expert, warned the popular crypto may fall further. He sees medium-term fair value for bitcoin in the $24,000 to $36,000 range. “There is little doubt that the boom and bust dynamics of the past weeks represent a setback to the institutional adoption of crypto markets and in particular of Bitcoin and Ethereum,” Panigirtzoglou said. “We note that the mere rise in volatility, especially relative to gold, is an impediment to further institutional adoption as it reduces the attractiveness of digital gold vs. traditional gold in institutional portfolios.”
Meanwhile, Coinbase CFO Alesia Haas told Yahoo Finance Live that the pressure on crypto prices should serve as a reminder of the risk factors for those new investors in the often volatile space. “I think those who are new to this space may have under estimated the volatility that we can see in this market. But crypto is volatile and we have to remember this is a really young industry and a very nascent asset class. So, while we have seen a lot of volatility, we have been dealing with this since the very beginning,” Haas said.