Cryptocurrency News

Crypto’s Frightening Relationship With Elon Musk: Ambassador Or Obligation?



When Tesla CEO Elon Musk Revealed His Company’s Bitcoin (B T c) exposure and crypto payments, BTC took off to reach its all-time high. However, soon after, Musk began tweeting about concerns over the environmental impact of BTC and Tesla reversed its crypto payments policy, causing bitcoin to lose half of its value and the entire crypto market to surrender. gave. In short, Musk tweets lukewarm support for crypto, and prices go up; Musk posted a meme Pointing out his “breakup” with bitcoin, and prices go down.

For a sector that prizes arbitrage and the wide distribution of economic power above all, the cryptocurrency space has given one man a lot of control over his luck. Hopefully the crypto market will soon recover from Musk’s addiction. At this point, though, the tech mogul’s Twitter talk is one of the most influential exogenous factors driving digital asset prices.

At the end of the day, who is Mr. Musk in the crypto industry – a cynical dude, an adversary, or simply a billionaire who takes some unfettered fun to play with in a trillion-dollar market?

While it’s impossible to know exactly what’s on the controversial billionaire’s mind, there is some room for evaluation of what his presence could mean for the industry in the long run – as well as being educated about his stance and motivation. an estimate.

Crypto Influencer #1

To date, Musk’s influence on crypto asset values ​​shows no signs of diminishing. Recently, Musk Tweeted in response to a Cointelegraph article Where he, passingly, clarified the conditions that could lead Tesla to resume the practice of accepting bitcoin transactions. And think what happened next? That’s right: Bitcoin recovered a few thousand dollars overnight.

This is what BTC is all about and therefore can be considered “serious”. A separate chapter in the Musk-crypto saga is his – possibly, tongue-in-cheek – partnerships with various altcoins that could see their market capitalization increase within hours in response to his tweets. Memecoin-in-Chief by systematically advancing Dogecoin (Doge) to go for more vague but poignant objects, such as porn industry coin (CUMMIES), Musk has had a hand in quite a few price movements.

The adverse impact of Musk’s antics on the crypto industry is well documented. First and foremost, there are retail investors who took inspiration from the Tesla CEO to make trades that cost him more than tolerate to lose. There are certainly many more people who have suffered without seeking direct attention from Musk, who have been victims of the market-wide recession that triggered his exodus.

At the scale of the industry, recent volatility storms appear to come in the way of advancing digital assets’ reputation as a mature and safe asset class. As a newcomer looking for an alternative place to park your money, how likely are you to be excited about an investment that could drop 40% in one day after a random tweet? A related concern is that such resilience to potentially nasty market manipulation could draw unwanted regulatory attention to the cryptocurrency space.

related: I Spy With My Ledger Eye: A Twitter Phenomenon to Make Bitcoin Mainstream?

Some still believe that there is an upside to Musk’s volatility, as Mati Greenspan, founder and CEO of financial advisory firm Quantum Economics, told Cointelegraph, “Musk’s involvement in the cryptocurrency space is a net positive. Volatility has been around for a long time. has been welcomed with further adoption as a driver of volume.”

Others, however, subscribe to the view that whatever benign results Musk’s crypto-related propaganda has yielded, the negatives are reinforced by a wide margin. Dean Steinbeck, co-founder and chief operating officer of blockchain solutions provider Horizon Labs, told Cointelegraph:

“Musk’s behavior has done great harm to crypto. First, he perpetuates the red herring argument that bitcoin is bad for the environment. This argument is bogus and perpetuated by projects with an ulterior motive. Second, Musk What gets attention is his amateurish tweets endorsing bullshit meme coins that have no real value.”

Steinbeck went on to say that Musk is “nothing more than a sociopathic billionaire who knows almost nothing about crypto, but believes he is an expert.”

why?

Many in the crypto space wonder what prompted Musk to crack the often contradictory but reliably market-driven tweets. Could it be as low and thick as rigging coin prices for profit? Or, perhaps, tweets with all their bumps and turns are a byproduct of a goodwill learning process? Or is most of it just for fun?

The funny hypothesis appears to be particularly influential, and some crypto markets participants are not happy with.

However, other crypto influencers are willing to give the Tesla CEO the benefit of the doubt. Brock Pierce, cryptocurrency investor and president of the Bitcoin Foundation, does not think that Musk’s actions affecting digital assets are ill-intentioned, telling Cointelegraph:

“It seems like [Musk] Has been very responsive to various opinions and learnings as he has gone down the crypto ‘rabbit-hole’, but I don’t think it has been opportunistic on his part. I think that’s similar to what he does in many industries, trying to go deeper into understanding them. Education is not a linear path, and he is going through his process and doing it in a very public way because of his large followers. “

Pearce added that as the cryptocurrency community becomes more forgiving, there is still a chance that Musk could be a very important advocate for the space, provided his intentions prove to be true in the medium and long term.

related: Death knell for Chinese crypto miners? Riggs running after action against government

Opinions vary widely regarding the latter possibility. When asked whether Musk has ruined his reputation with the crypto community for good, Greenspan replied:

“Loudly, yes. The people of this region are extremely sick and tired of his lax interference in the markets.”

Greenspan summarized the popular sentiment by saying that, while many are happy to follow for a laugh, most are actually upset.

If the latter is the case for a critical mass of crypto market participants, this could be good news. Quite a lot of “musk fatigue” would be required to break the “musk spell” and free an entire property class from the whimsical influence of a powerful man.