A month is a long time in the world of cryptocurrency. After recording a high of $64,800, Bitcoin, the world’s most popular and volatile cryptocurrency, dived over 50 percent from its high in April to as low as $30,681 on May 19, bouncing back to $37,002 at the days end.
It was not the only one. The cryptocurrency sector experienced mayhem losing over $177 billion in market capitalization on May 19 after Bitcoin and Ethereum reported the largest single day price drop since March 2020 as China banned its financial and payment institutions from providing cryptocurrency services.
As Reuters reported, the fall could have been even larger but for the support of two of the biggest backers of crypto currencies - Tesla Inc. chief Elon Musk and Ark Invest's chief executive officer Cathie Wood. The former tweeted a diamond emoji indicating that bitcoins are safe investments.
Musk’s history with crypto
Musk’s series of pronouncements on cryptocurrency, usually through twitter, have been influencing or triggering price fluctuations.
On March 24, for instance, the Tesla chief tweeted saying that one could purchase a Tesla with Bitcoin. This cheered up the crypto market giving it the assurance that an institutional giant like Tesla is backing the game.
Later, on May 13, Musk has reversed his earlier decision of Tesla selling vehicles in exchange for Bitcoins. This has now sent tremors in the crypto world leading to fall in Bitcoin prices.
The chart below shows the movement in Bitcoin prices alongside Musk’s tweets.
To be clear, I am *not* an investor, I am an engineer. I don’t even own any publicly traded stock besides Tesla.
However, when fiat currency has negative real interest, only a fool wouldn’t look elsewhere.
Bitcoin is almost as bs as fiat money. The key word is “almost”.— Elon Musk (@elonmusk) February 19, 2021
BTC (Bitcoin) is an anagram of
TBC(The Boring Company)
What a coincidence!— Elon Musk (@elonmusk) March 12, 2021
Tesla is using only internal & open source software & operates Bitcoin nodes directly.
Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency.— Elon Musk (@elonmusk) March 24, 2021
Pay by Bitcoin capability available outside US later this year— Elon Musk (@elonmusk) March 24, 2021
No, you do not. I have not sold any of my Bitcoin. Tesla sold 10% of its holdings essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet.
— Elon Musk (@elonmusk) April 26, 2021
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP— Elon Musk (@elonmusk) May 12, 2021
Bitcoin is actually highly centralized, with supermajority controlled by handful of big mining (aka hashing) companies.
A single coal mine in Xinjiang flooded, almost killing miners, and Bitcoin hash rate dropped 35%. Sound “decentralized” to you?https://t.co/Oom8yzGRNQ— Elon Musk (@elonmusk) May 16, 2021
To clarify speculation, Tesla has not sold any Bitcoin— Elon Musk (@elonmusk) May 17, 2021
Credit to our Master of Coin
— Elon Musk (@elonmusk) May 19, 2021