Bitcoin prices fell by 30% compared to the April high in 64 829 dollars on investors' fears, that Tesla will sell its coins at 1,5 billion. The reasons for what happened, analysts figured out ABF "Economics today».
Elon Musk scares bitcoin holders
The most famous cryptocurrency, since March 2020 a year that has added more than 1500%, has been the most volatile in the last month. Just last week, the price of bitcoin fell below 50 000 dollars for the first time since March of this year after, as Elon Musk announced on Twitter, that the electric car maker will stop accepting digital currency as payment for its cars. In doing so, he referred to environmental problems, token mining.
The statement was supplemented by a message that, that previously purchased coins in the amount of 1,5 billion dollars will not be sold. However, after that, Musk responded ambiguously to a message from one of the users of the social network that, that holders of e-currency may suffer greatly, if Tesla decides to close its positions.
The market is afraid, billionaire, famous for its impulsiveness, at some point, he may really want to get rid of the entire volume of cryptocurrency, in the accounts of his company, especially given the fact, what mark does he leave on his "environmentally friendly" reputation?.
The billionaire was misunderstood again
The head of the largest electric vehicle manufacturer later said, that his company has not sold a single bitcoin and does not plan to do so in the foreseeable future. Furthermore, Musk noted, that he really believes in cryptocurrency. This is not surprising, since he talks a lot about his support for digital currency, especially Dogecoin, in whose development he takes an active part.
Also on his Twitter blog, answering a question from one of the subscribers, Musk suggested, what he, perhaps, will consider the issue of creating a new cryptocurrency, if Dogecoin does not receive the required features with future updates. In an earlier tweet, the Tesla CEO said, what would like, so that the token will increase the speed and size of its block tenfold and reduce the transaction fee in 100 time.
In addition, one more story must not be forgotten., what happened 8 May this year, when the billionaire was invited to host Saturday Night Live and jokingly named the currency, which he is working on, "Wiring". In anticipation of Musk's appearance on the TV show, the cost of Dogecoin has risen to a record high of almost 0,73 dollar, however, during the broadcast, it collapsed immediately on 30%.
Cryptocurrency market manipulations
Electronic currencies have always stood out for their high volatility, which is due to the decentralization of trading platforms and the absence of any regulation. With the growing popularity of the direction, not only the asset price has grown, but also the number of manipulations, held with them. Many actions were performed indirectly, through the statements of famous people on social networks.
This is not new for the market as a whole., Suffice it to recall the Twitter posts of former US President Donald Trump, which often provoked movements in the stock and commodity markets, or tweets of the same Musk regarding his own company, influencing the dynamics of the Tesla share price, as well as posts from the recently sensational Reddit community WallStreetBets, almost bankrupt large funds.
But there is a fundamental difference between the classic markets and the cryptocurrency market.. It lies in the fact, that trading on crypto-exchanges is not regulated in any way. All manipulations, which take place in traditional markets, rigorously reviewed by the US Securities and Exchange Commission, and in case of violations, the person responsible for them may be punished, starting from an impressive fine, ending with a real prison sentence.
And if Donald Trump was blocked in all social networks for his statements, and Elon Musk himself has repeatedly received warnings from regulatory bodies, then there is no control over electronic currencies. Therefore, an investor should be extremely careful in this market..
Published: World View Source