Bitcoin’s ‘Muskification’ Crisis

In the words of early Bitcoin holder Old Cat, “If one person can make Bitcoin jump up and down with one word, it only means it’s still too small.

Bitcoin's 'Muskification' Crisis

The crypto-asset market is in the midst of an up-and-down chaos due to Tesla founder Elon Musk’s comments.

On May 17, Musk first accused BTC of not being decentralized enough, and then used the word “Indeed (Indeed)” in response to a netizen’s speculation about Tesla dumping BTC, triggering a market panic and a short-lived drop of over 10% in BTC. However, at around 2pm BST on the 17th, Musk responded to another netizen’s tweet by saying that Tesla was not selling BTC, and the market instantly pulled up another 6%.

Bitcoin’s one-two punch quickly transmitted to the entire crypto asset market, with the total market capitalization of $218.08 billion evaporating 7.3% from the previous day.

For the first time in the 10 years that Bitcoin has had a price, an individual was able to influence the market in such a way. 3 months ago, Musk changed his Twitter signature to Bitcoin, and BTC subsequently soared; recently he made a bearish comment about BTC on this social platform, which triggered the market to plunge. Musk was teased by netizens as the first person to “tweet to rule the coin”. There is no way to verify whether Tesla and Musk personally sell coins.

After Musk’s comments became the baton that swayed market sentiment, we at least saw the significance of Bitcoin creator Satoshi Nakamoto’s ‘hidden jungle’. It is worth thinking about the influence of ‘Muskified’ big capital as huge amounts of traditional financial capital enter the free, unregulated crypto asset market.

Although crypto assets already have a market capitalization of $2 trillion, which is at most equivalent to an Apple, the crypto asset market led by Bitcoin still has a long way to go compared to the richness and maturity of traditional financial markets.

Musk’s Tweets Influence BTC’s Rise and Fall

Tesla founder Elon Musk continues to influence the crypto asset market through his tweets.

On May 17, Musk once again tweeted his disapproval of BTC, saying in a reply to a comment from a netizen that BTC is actually highly concentrated, with the vast majority of it controlled by a handful of mining companies, and that “there was a problem with a coal mine in Xinjiang that caused BTC’s arithmetic to drop by 35 percent.

This comment combined with the previous news that “Tesla suspended accepting bitcoin payments” once again added to the price of bitcoin. Bitcoin, which had repaired to $49,000 after plunging the day before, fell again because of Musk’s comments.

During the market’s downfall, one Twitter user left a message for Musk, “Bitcoin holders will surely slap themselves next quarter if they find out that Tesla has dumped its remaining BTC positions. Fatalistically, Musk replied to the tweet with the word ‘Indeed (Indeed)’. Word spread quickly, and “Musk implied that Tesla had sold its Bitcoin position” created a massive panic scene, with Bitcoin falling to around $42,000 in response, a 14% dip from the previous day’s high.

Musk Responds to Tesla Dumping BTC Speculation with ‘Indeed’

The downfall of the “King of Coins” in turn triggered a secondary disaster, with most tokens falling along with it, and the “oldest” Ether couldn’t take it anymore, sinking to $3,300, as the entire market wailed.

However, Musk didn’t stop there. At around 2pm Beijing time on the 17th, he replied to a netizen tweet saying, “Tesla is not selling any bitcoin. As soon as the words left his mouth, BTC rose in response, quickly pulling back above $45,000 from $42,432, up 6% in half an hour.

The sentiment and wallets of investors in the crypto asset market were swayed by a single tweet from Musk. Bitcoin rallied, but investor anger was building, with some tired of Musk’s ‘capriciousness’ and even more messages from people who had lost all their money because of his influence.

In a crypto community that espouses the spirit of decentralization, Musk’s unparalleled influence on this market has infuriated many coin holders who respect the fundamentalist spirit of BTC. Compared to Satoshi Nakamoto, the founder of Bitcoin, who has actively retired from the world for more than a decade, Musk has become a force to be despised by the crypto community by influencing the market through various unconventional statements.

Keep in mind that Musk looked like he had been a major supporter of BTC until he continuously sang its praises for 2 months. On January 29 this year, Musk changed his Twitter signature to “Bitcoin”, and on that day BTC rose sharply by 16% from $32,000 to a maximum of $38,000. On February 8, Tesla, which was helmed by Musk, announced to invest $1.5 billion to buy BTC, pushing BTC upward again; on March 24, Tesla officially announced to accept tescoin payment, adding fuel to BTC again and boosting it to break the The $50,000 mark.

During that time, Musk became the most influential evangelist for Bitcoin.

When Tesla announced it was selling 10% of its bitcoin on April 24, some took it as a bad sign at the time, but many more basked in the euphoria of bitcoin approaching $60,000 again.

On May 13, Musk said that Tesla would no longer accept BTC payments because it was “not environmentally friendly enough”; now, he has added “not decentralized enough” to his reasons for singing the praises of Bitcoin. Musk’s tweet after tweet pushed BTC into a downward spiral.

The market is ringing with calls to ‘de-Muskify’

Many have described his over-involvement in the crypto asset market as “Musk for success, Musk for failure”. Zhao Changpeng, founder of crypto asset exchange giant Coinan, even protested by shutting down Musk.

To investor Lucas, Musk’s accusation that BTC is not decentralized enough seems like a “layman” because anyone who understands Bitcoin’s mechanism knows that PoW (Proof of Work) is the underlying logic of Bitcoin’s network operation, and after the industrialization of mining, it has gradually become an economic model where miners come and go as they please depending on whether they make a profit or not. The ability to calculate power, “decentralized arithmetic, decentralized coin-holding addresses, decentralized development is the best proof that Bitcoin is decentralized.

As for Musk’s proposed DOGE network to expand blocks to increase transaction efficiency and lower rates, it reminds many cryptocurrency seniors of bitcoin’s fork wars over and over again, “His ideas are new knowledge to the white guys who got on crypto assets this year, but to the cryptocurrency community it’s an old topic that’s already been realized. Lucas said helplessly, “The cryptocurrency community lost on the KOL fame not being big enough.

For Musk’s “Bitcoin is not environmentally friendly” question, there has already been a debate with it on Twitter by industry players. Self-publisher Wu said blockchain pointed out that Musk’s claim about a 35% drop in network-wide arithmetic lacked merit. Xinjiang security checks, (network-wide arithmetic) fell by up to 17%, the current Sichuan arithmetic power restrictions, the network-wide arithmetic power also fell by only 15-20%, “Sichuan is mainly hydropower, Xinjiang also has risk with solar energy, China’s annual mining clean energy accounted for 40%, the abundant water period can account for 60%-70%.

Some industry insiders believe that the businessman, who intends to develop Mars and also manages a public company, could not have bought $1.5 billion of BTC without knowing the logic of how Bitcoin works, “Now it seems that he is actually nothing more than a businessman who bought low and sold high BTC, and was seen as a ‘god’ during the upswing in BTC prices because of his fame.

People continue to speculate about Musk’s motives for crypto assets through his comments. Just as Musk was vociferously singing the praises of BTC, he continued to export his love for the dog coin DOGE. Interestingly, however, DOGE, like BTC, is also generated through PoW mining, which also consumes electricity and computing power to mine. Musk was thus dismissed as a ‘double standard’.

If you take the standard of “decentralization” to measure DOGE, it is afraid that it is a good deal worse than BTC. According to the data of May 17, the top 10 addresses of DOGE hold 44.32% of the circulation and the top 100 addresses hold 66.82% of the circulation; while the top 10 addresses of BTC hold only 5.16% of the circulation and the top 100 addresses hold 13.68% of the circulation. From the perspective of coin holding ratio, BTC’s circulation is much more decentralized compared to DOGE.

Musk’s frequent changes of face on BTC have somewhat discounted his credibility in the crypto asset market. Under his tweet, some users said that Musk’s erratic attitude brings great uncertainty, “I will sell Tesla’s stock and dogcoin. Some simply advised him and Tesla to “just sell Bitcoin and don’t come back. Someone even posted a token called “FUCK ELON MUSK,” and the coin rose 351% in an hour. Investors in the crypto asset market have expressed their hatred for Musk in a variety of ways.

For the first time in more than a decade since BTC’s founding release, this market is being swayed at will by the influence of one man. Ironically, it wasn’t Bitcoin creator Satoshi Nakamoto who swayed it; he relinquished control and influence over Bitcoin by ‘hiding in the jungle’.

Musk became the baton of “centralization” himself when he criticized “Bitcoin for not being decentralized enough”. Stakeholders are tired of his capriciousness and are more worried about whether his and Tesla’s bitcoin holdings will come crashing down. And by projection, the amount of bitcoin Tesla owns is only 0.23% of the volume in circulation.

Tesla’s BTC holdings are only 0.23% of the volume in circulation

Whether Musk’s comments were intentional or unintentional, this has formed a metaphor for the “Muskification” crisis that will inevitably occur when Old Money’s huge amount of money enters this not-yet-mature market, bringing “institutional bull” at the same time.

In the words of early Bitcoin holder Old Cat, “If one person can make Bitcoin jump up and down with one word, it only means it’s still too small.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/bitcoins-muskification-crisis/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2021-05-17 22:09
Next 2021-05-17 22:23

Related articles