Bitcoin had a rough weekend that many investors are blaming on Tesla CEO Elon Musk who suggested, in a series of tweets, that the electric car company would be dumping the cryptocurrency. Even after clarifying early this morning that the company had not sold the crypto, the damage was done.
Bitcoin was at $45,000 this morning, a 7% drop in 24 hours according to CoinMarketCap.
Musk’s company said in February that it had purchased $1.5 billion of Bitcoin and would start accepting the crypto as a form of payment Tesla, which reported its first-quarter earnings in April beating estimates. It had almost $2.5 billion worth of Bitcoin, according to a Securities and Exchange Commission filing.
Tesla claimed that “the fair market value of Bitcoin held as of March 31, 2021 was $2.48 billion.”
Bitcoin started dropping after Musk tweeted “indeed” in a response to a tweet from Cryptowhale that said, “Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their #Bitcoin holdings. With the amount of hate @elonmusk is getting, I wouldn’t blame him….”
However, in a 180, Musk clarified his position early this morning, tweeting “to clarify speculation, Tesla has not sold any Bitcoin.”
In addition, Bitcoin had already been hurt last week when the Technoking announced on Twitter: “Tesla has suspended vehicle purchases using bitcoin.”
“We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel. Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment,” Musk added.
While Musk has certainly been influencing the prices of Bitcoin and cryptos in general with a single tweet, individual investors should be aware of the risks of investing in them. While the rewards can be immense, (look at Dogecoin which gained 13,000% since January for example,) you should be ready to stomach wild swings and huge losses.
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