Did a tweet from Elon Musk cause the Bitcoin crash? This is what I know
Tycoon Elon Musk, through his firm Tesla, spent $ 1.5 billion in Bitcoin a few weeks back. The sale pushed the market cap over $1 trillion and a price above $58,000 was hit by the cryptocurrency . However, the CEO of SpaceX indicated that maybe Bitcoin is overvalued, considering the benefits that the acquisition has given him.
Bitcoin (BTC) started to display peaks pointing to the upside on Saturday, February 21. For the first time that day, Tesla’s investments, adding to those of Mastercard and BNY Mellon, caused its market cap to reach $ 1 trillion.
The cryptocurrency had reached $ 58,000 per unit by Sunday night, the 22nd. That is, almost double the $29,000 it cost on January 27, the lowest price this year so far.
Bitcoin plunged below $ 53,000 during the first hours of this Monday, February 22, reflecting a decline of between 8 and 10 percent .
Ethereum, by market capitalization, the second largest digital currency, on Saturday set a record of more than $ 2,000 per device. This Monday, though, it also dropped to about $ 1,700. Even, as Ethereum began the year trading at just $ 730, you can see considerable progress.
• Bitcoin fever meets Elon Musk
Tesla reported a $ 1.5 billion stake in Bitcoin earlier this month. Musk acquired 43,000 bitcoins during different activities in January, according to analysts. Last month’s median price was almost 35,000 dollars. In addition, the firm announced itself prepared to recognise its electric vehicles as a form of payment for cryptocurrencies.
Tesla made a return of close to a billion dollars with this gamble, says Dan Ives, Wedbush Securities specialist. To put this in perspective, Tesla is on a road to having more of its Cryptocurrency assets than the sales of its electric vehicles in all of 2020,”To put this in perspective, Tesla is on a path to make more of its investments in Bitcoin than the proceeds from the sale of its electric vehicles in all of 2020,”To put this in perspective, Tesla is on a path to making more of its investments in Bitcoin than the sales of its electric vehicles in all of 2020.
• What does Elon Musk have to do with the Bitcoin crash?
In the middle of Bitcoin’s ups and downs, a consumer rebuked Musk last Friday for his role on the cryptocurrency. Peter Schiff, an economist and market analyst, remembered last December a statement made by the Tesla CEO about BTC.
“According to Elon Musk ‘Bitcoin is almost as much of a hoax as fiat money.’ So Musk considers both Bitcoin and fiat money to be bullshit. I agree, I just think that Bitcoin, which is a digital fiat currency, is even more nonsense than the paper fiat currency issued by central banks. Gold is not silly. It’s real money and better than both! “ the cynical digital money tweeted.
Fiat money or inorganic wealth, it should be noted, is one that is not dependent on the valuation of precious metals. Instead, the popular conviction that it has meaning, that is, a society’s trust, promotes it. The Dollar, the British Pound, the Euro and the Yen are fiat currency, for instance.
The 49-year-old tycoon replied bluntly hours later:
“An email that says you have gold is not the same as having gold. You could also have cryptocurrencies. Money is just a piece of information that allows us to avoid the inconvenience of bartering. That data, like all data, is subject to latency and error. The system will evolve toward that which minimizes both , ”Musk explained.
First, the SpaceX creator posted the message that everybody associates with the collapse of Bitcoin: “That said, BTC and ETH (bitcoin and ethereum) seem to be high.”
Some relate Bitcoin’s deflation to the tweet from Musk, as the temporal proximity between the two occurrences may provide the feeling of cause and impact. Musk’s announcement, however, arrived two days before the blockchain reached its all-time high. That is, its price proceeded to increase even after the businessman indicated that BTC could be overvalued.
In the other side, before this Monday morning, the Bitcoin collapse took place, which may not square with the immediate influence of Elon Musk’s tweets as it comes to electronic currencies. Only by listing it on your social network, it’s enough to recall the moments that the value of the Dogecoin has risen. It will also be quite dangerous to assume that the businessman caused the cryptocurrency to decline, but it can not be ruled out entirely either.