Tesla CEO, Elon Musk caused another setback for players in the crypto market after his tweet led to a 5% plunge in the price of Bitcoin in the early hours of Friday.
Musk shared a meme which many interpreted as a hint about a possible breakup with Bitcoin, a coin he has recently expressed skepticism about over environmental degradation that emanates from mining the coin.
Bitcoin hit an intraday high of $39,500 according to Tradingview, but it dumped sharply in the hours that followed, apparently in reaction to Musk’s latest incitement.
The world’s leading digital asset fell 5%, (- $2,000), in a couple of hours dipped to $37,500 before a slight rebound.
— Elon Musk (@elonmusk) June 4, 2021
Over time, Musk primarily through his posts on Twitter has caused a sharp decline in the price of Bitcoin and by extension other cryptocurrencies.
BlocDesk spoke exclusively with Greg Waisman, co-founder, and COO at the global payment network Mercuryo and a crypto analyst about Musk’s influence in the crypto market. Here are excerpts.
How does Elon Musk influence prices in the crypto market?
Elon Musk’s tweet is known to influence the crypto industry as it serves as a basis for extreme price fluctuations. While Elon argues he does it for fun, his actions paves way for unhealthy market activities. In general, Elon’s influence is a concern to genuine traders/investors.
The latest Elon’s tweet has pushed Bitcoin price down by roughly 5%. Is there some sort of resistance from the coin and Elon’s tweet?
To a large extent, Bitcoin investors are learning to ignore tweets from Elon Musk and this was made evident as the price drop was not as huge as we have seen before. Bitcoin investors strive to maintain a united front by limiting how they panic sell. This is a good start for Bitcoin.
Will the crypto market grow independent of influence from people like Elon and only bow to influence from regulators and happenings in the global and international market?
We are getting to the point where crypto stakeholders will react only based on relevant fundamentals. The cryptocurrency industry is growing towards maturity, and to a large extent, knowledge accumulation is taking the center stage. As market stakeholders get additional knowledge, they will learn to base their decisions on the influences that matter most, like regional regulations.
Underplaying Elon Musk influence in crypto market
The effect that Elon Musk’s tweets have on Bitcoin markets is evidence that inexperienced and emotional traders are still dominant enough to cause this volatility by panic selling.
Institutional and professional investors that are looking at the bigger picture would not be as easily fazed by such trivialities.
Unconfirmed sentiment also has it that Musk is purposely trying to manipulate the markets for the benefit of Tesla, which may be able to mine BTC using solar power in the future.