Amid Cryptocurrency’s Plunge, Musk and Sister Wood Cathie Wood Shout Out as Bitcoin Rebounds Big

Bitcoin is in a “sell-off” mode after the rout, but it’s not necessarily at the bottom.

Cryptocurrencies collapsed across the board, with most of the major cryptocurrencies recording double-digit or more losses, with bitcoin’s maximum 24-hour drop exceeding 30% and ethereum’s maximum drop exceeding 43%.

Amid Cryptocurrency's Plunge, Musk and Sister Wood Cathie Wood Shout Out as Bitcoin Rebounds Big

In the midst of the plunge, “Sister Wood” Cathie Wood and Tesla CEO Musk both came out to shout at the market, expressing their support for bitcoin.

Cathie Wood: Bitcoin will still rise to $500,000
“Cathie Wood said that bitcoin is in a “sell-off” after the rout, but it’s not necessarily at the bottom. In terms of the price target, she still maintains her previous view that bitcoin will rise to $500,000.

In the 2021 Big Ideas annual report, “Sister Wood’s” ARK mentioned that if all S&P 500 constituent companies allocate 1% of their balance sheets to bitcoin, bitcoin’s price will rise by $40,000 per unit; if the allocation ratio becomes 10%, the price will rise by $400,000 per unit. . In addition, ARK also said that if institutional investors allocate 6.55% to bitcoin, the unit price of bitcoin would rise by $500,000.

Amid Cryptocurrency's Plunge, Musk and Sister Wood Cathie Wood Shout Out as Bitcoin Rebounds Big

And in a February interview with Yahoo Finance, Cathie Wood explained why she’s bullish on bitcoin from two perspectives. On the one hand, the speculative component of bitcoin is not as high as it used to be, and the investment community is becoming more sophisticated. Before Tesla, there have been companies like MicroStratey and Square that have announced holdings in bitcoin. On the other hand, over the last decade, bitcoin has been the only investment option that has a low correlation to other traditional assets. This means that it is a good diversification option for institutional investors.

Musk: Tesla Has Diamond Hands
On the same day, as the market plunged, Tesla CEO Musk posted on his personal social media account that “Tesla has Diamond Hand”. In common parlance, having a “diamond hand” means holding a position until the target, despite market volatility. Market opinion interprets this to mean that Tesla will not sell off the bitcoin it already has. The news also narrowed Bitcoin’s 24-hour decline to about 14% from more than 30% previously, returning the price to $40,000.

Amid Cryptocurrency's Plunge, Musk and Sister Wood Cathie Wood Shout Out as Bitcoin Rebounds Big

This comes after Musk said on May 12 after-hours on U.S. stocks that Tesla has called a halt to buying cars with Bitcoin because of concerns that Bitcoin mining and trading is causing the consumption of fossil fuels, especially coal, to skyrocket. Although he added that Tesla will not sell any bitcoin and that it intends to do transactions with bitcoin as soon as bitcoin mining transitions to using sustainable energy, the above statement still sent bitcoin plummeting. And over the latest past weekend, Musk hinted on Twitter that Tesla may have sold bitcoin, causing bitcoin to sink further. While he later updated that Tesla was not selling, the boost was limited.

It should be noted that while bitcoin has plummeted, the cost of buying bitcoin in Tesla’s hands may still be below the market price. According to earnings calculations, the fair market value of Tesla’s bitcoin holdings as of March 31 was $2.48 billion, which means the company is expected to make a profit of about $1 billion if it liquidates the digital currency. Taking into account the March 31 bitcoin price of about $59,000, the above figures mean that Tesla’s average bitcoin position is less than $25,000 per unit, which is still more than 50% profitable at current market prices.

Exploding positions and then exploding again! Cryptocurrency investors are hurting
In the early morning of May 17, Beijing time, the market interpreted Tesla CEO Musk’s response in a tweet as “Tesla may have sold its remaining bitcoin holdings,” but on the morning of May 17, Musk tweeted to clarify that Tesla did not sell any bitcoin. In this context, according to Bitcoin Home, the cryptocurrency market has seen a total of 234,000 people explode in the past 24 hours, with the amount of exploding positions reaching $14 billion and the largest exploding order reaching $90 million.

On May 19, cryptocurrencies collapsed across the board. At 21:10 GMT, Bitcoin hit a low of $30,066, a “cut” from its peak in 2021. The latest data shows that in the last 24 hours, a total of about 775,700 people have become victims of a blowout, with the largest single blowout occurring in Huobi-BTC, worth up to $67 million.

Posted by:CoinYuppie,Reprinted with attribution to:
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