Well, Dogecoin remained the hype-driven coin as Elon Musk continued the joke about the alt becoming ‘world’s cryptocurrency.’ However, the Tesla CEO expanded his reach and targeted Bitcoin; initially, he came out as an enthusiast. Musk’s optimism was reflected in Bitcoin’s price: Tesla announced it had bought $1.5 billion in Bitcoin and signaled its intent to start accepting Bitcoin as payment for vehicles. In March, the CEO tweeted, “you can now buy a Tesla with Bitcoin,” only to suspend the same due to concerns about fossil-fuel usage for Bitcoin mining and transactions.
Musk’s rollercoaster of emotions on Bitcoin impacted its price at every stage. Be it his support for BTC or Tesla investing in BTC followed by its sales shortly. This induced volatility in the Bitcoin market, which cannot be denied.
However, can we say Musk was manipulating the market? Not without evidence.
Sygnia CEO, Magda Wierzycka in an interview criticized the Tesla CEO and stated:
“What we have seen with Bitcoin is price manipulation by one very powerful and influential individual.”
Musk called this inaccurate and added:
“Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market.”
He added that the company would resume allowing BTC transactions once there was confirmation that miners were using approximately 50% clean energy with a “positive future turned.”
Bitcoin’s current period of consolidation can be attributed to news about China cracking down on crypto and Elon Musk’s Tweets.
However, this raised the question of Bitcoin being an un-correlated asset. Recent times have provided evidence to the contrary. Many have stated that the cryptocurrency market has been getting influenced by industry decisions and individuals tweets.
Thomas Lee of Fundstrat opined that the impact of ‘institutional investors’ is still very small and the changes caused by a company or a person meant the market needed to evolve further.
Just a personal observation, but the fact #crypto and #bitcoin prices respond to actions by a company or individual show this market still needs to evolve further.
– put another way, really highlights that the impact of ‘institutional investors’ is still very small https://t.co/xVwTKlBZn0
— Thomas Lee (@fundstrat) June 13, 2021
