Flipping Faster than a Book, Musk Manipulates Crypto Market with Rhetoric?

The cryptocurrency industry will only truly mature when it is no longer inflamed by the emotions of a single individual.

The crypto market was overshadowed last week when Tesla announced that it was suspending support for Bitcoin as a payment method for its products, sending Bitcoin below the $50,000 mark. However, it didn’t end there.

Flipping Faster than a Book, Musk Manipulates Crypto Market with Rhetoric?

Chart translation.

Netflix: Bitcoin backers are going to punch themselves in the face when they find out next quarter that Tesla has liquidated its bitcoin position. I wouldn’t blame Musk, considering the hate he’s currently getting from Bitcoin backers.

Musk: Indeed.

Last night, Musk continued to tweet a series of short-selling statements about bitcoin, such as “Bitcoin mining is not decentralized,” “Bitcoin supporters’ accusations make me want to focus on dogcoin,” and even hinted that Tesla might sell its bitcoin holdings, directly triggering a plunge across the cryptocurrency market.

With some institutions already laid out in bitcoin, Tesla’s influence on the price of bitcoin as one of the largest bitcoin holding companies cannot be overstated. “If Tesla thinks bitcoin is bad for the environment, then other institutional investors may fear government scrutiny and decide to sell bitcoin” – this is currently the biggest concern for investors in the industry.

Flipping Faster than a Book, Musk Manipulates Crypto Market with Rhetoric?

So, was Tesla’s suspension of Bitcoin payment support a spur-of-the-moment decision by Musk, or did the board or executives succumb to outside pressure?

In February of this year, Tesla made a $1.5 billion investment in Bitcoin and quickly announced that it would accept Bitcoin as a payment method. Although Bitcoin is positioned more as a “reserve asset”, being a payment method is more of a symbol of mainstream acceptance. So this boon sent bitcoin soaring in response.

In many parts of the world, bitcoin-based payments are spreading as a result of the spread of bitcoin’s network effect. However, in theory, bitcoin is not particularly suitable as a means of payment at the moment due to the higher transfer fees and slow confirmation times.

Tesla has reported that Bitcoin is a high-quality reserve asset and a useful payment method, a statement that is actually somewhat contradictory in itself – if Bitcoin is positioned as a hedge against inflation, then why should consumers use Bitcoin as a payment? For most of Tesla’s target audience, bitcoin has no advantage over bank transfers or credit card payments. They are perfectly capable of using bitcoin as collateral to lend fiat currency, which they can then use to purchase a car.

In other words, the number of Tesla customers who actually want to pay in Bitcoin is extremely small, if not almost non-existent. Therefore, the economic impact of Tesla’s suspension of bitcoin payments, both for Tesla itself and for bitcoin, is essentially negligible. The reason for Tesla’s decision is that “mining and trading in bitcoin will rapidly increase fossil fuel depletion.”

According to Tesla’s website, Tesla’s mission is to “accelerate the world’s transition to sustainable energy.” Last week, Tesla was included in the S&P 500 ESG Index, which is based on environmental, social and corporate governance scores within the same industry. Earlier this week, Reuters reported that Tesla was seeking access to the multibillion-dollar U.S. renewable fuel credit market. From this perspective, Tesla’s suspension of bitcoin payments is understandable and perhaps not an intentional manipulation of the market by Musk.

From a global perspective, some countries and regions have begun to realize the potential of cryptocurrency mining-related businesses. In many cases, bitcoin mining can actually boost economic development for regions with abundant natural resources but low infrastructure spending. On a policy level, the more voices talking about bitcoin mining, the more acceptable it becomes as an industrial activity. Governments are realizing that mining bans will only drive it elsewhere. At the same time, mining with renewable energy sources removes the stereotype of so-called energy depletion from mainstream society, thus removing a significant barrier to widespread investment in the bitcoin market.

In summary, the concerns raised by Tesla regarding the energy losses of bitcoin mining are not a bad thing, and if they can rise to the level of policy attention and energy improvement, they will instead remove barriers to bitcoin investment and incentivize further development of the cryptocurrency industry and exploration of bitcoin’s role in many fundamental areas of society.

If Tesla’s suspension of support for Bitcoin payments is “justifiable,” Musk’s personal attitude can be described as erratic.

Last month, when Twitter co-founder Jack Dorsey tweeted that “Bitcoin inspires green energy,” Musk replied “yes.

And after grayshirting the dogcoin, Musk seems to have started to shift his attitude toward bitcoin. While constantly shouting orders for dogcoin, Musk said for a while that bitcoin mining was too centralized, and then hinted that Tesla might have sold its bitcoin position, making the whole market unsettled. In the afternoon, Musk said again that Tesla had not sold any bitcoin. The market instantly rallied again.

Some said, “Musk isn’t even short of money, what could he have in mind that’s bad? He doesn’t have to manipulate the market, and influencing the price trend was just an unintentional move.” Some people also said, “Musk found that he could easily sway the cryptocurrency market up or down with his own power on Twitter, making money is much easier than selling cars, so he naturally enjoys it, which cares about the death of retail investors.”

I believe that Musk’s comments may affect the price of bitcoin in the short term, but its long-term value is not determined by Musk’s comments, and as long as the fundamentals of bitcoin do not change, then the long-term price will still follow the value. When a single Musk can sway the market, the entire industry needs to reflect – is investing in Bitcoin because of admiration for Musk the man? Only when the cryptocurrency industry is no longer inflamed with emotions by a single individual will it truly mature.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/flipping-faster-than-a-book-musk-manipulates-crypto-market-with-rhetoric/
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