The cryptocurrency market has suffered another big fall — and once again it appears to have been sparked by an Elon Musk tweet.
Bitcoin was one of the biggest losers, slumping to a three-month low of $42,441, having been as high as $61,000 last month. But it was far from the only crypto to suffer: as of 1.30 p.m. E.T. today (May 17), the market as a whole was down by around 8% versus Sunday, according to CoinMarketCap. (opens in new tab)
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The trouble started when Musk responded to a tweet (opens in new tab) that read “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…”
Musk replied (opens in new tab) “indeed,” which wasn’t much of a denial that Tesla could dump its Bitcoin. The currency immediately dropped in value, but Musk wasn't done. In the early evening, California time, he tweeted (opens in new tab) again simply, “To clarify speculation, Tesla has not sold any Bitcoin.” Just like that, the market started to gain again: Bitcoin regrouped to around $45,000, although it's currently dropped back to $42,500.
You might be old enough to remember the last time the Tesla CEO had a massive impact on the value of Bitcoin, because it was only last week. On Wednesday (May 12), Musk tweeted a statement explaining that Tesla was no longer accepting Bitcoin as payment for cars. His statement sent the value of the coin downwards, and the rest of the market followed.
Tesla’s investment in Bitcoin is hardly insignificant: the company revealed in an SEC filing in February that it had $1.5 billion invested in the cryptocurrency. And it’s also clear that, when it comes to Bitcoin, Musk has significant power over the market.
Nor is it just Bitcoin: Dogecoin, which appears to be Musk's favorite cryptocurrency, crashed massively after he called it a "hustle" on Saturday Night Live earlier this month, and jumped after he tweeted that he was working with Doge devs to make it more environmentally friendly.
Musk’s power certainly isn’t limitless, but there are few other people with audiences as large as his that react to his musings on crypto the way they do. Ongoing advice remains the same; while cryptocurrency has enormous potential and certainly isn’t a fad or just a tool for criminals, anyone investing in it should only spend what they can afford to lose. And maybe keep an eye on Musk's Twitter feed, too.
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