Very sharp fluctuations in the cryptocurrency market since its inception years ago, and the impact of Elon Musk, the owner and CEO of Tesla, was very prominent on the level of speculation in a market that earned investors billions and caused heavy losses to others.
So how did Musk manipulate the market, especially the most famous currency ever, Bitcoin?
At the beginning of this year, specifically on January 7, 2021, Musk became the richest person in the world thanks to the rise in the price of his group’s shares on the stock exchange, according to Bloomberg News. CNBC estimated Musk’s fortune at about $185 billion.
With the significant increase in the share price of Tesla, of which he owns 18% on the stock exchange, the 49-year-old businessman has surpassed the owner of the “Amazon” group, Jeff Bezos, who has been the world’s richest person since 2017, knowing that Musk also owns a company “Tesla.” SpaceX for space technology contracted with the US Space Agency (NASA), to send manned flights and others to transport supplies to the International Space Station.
After occupying the “first rich” position globally, Musk seemed more eager to intensify his tweets, causing a crisis, until he announced on February 3 that he would stop using Twitter for some time, following tweets that caused confusion in the stock exchange and led to a significant increase in the value of shares. Several companies, knowing that he joined Twitter in June 2009.
“I’m going to stop using Twitter for a while,” Musk, who is from South Africa, wrote to his nearly 45 million followers. But he did not give any explanation for this sudden decision.
A few hours later, Musk’s praise on Twitter of Etsy, which specializes in selling small craftsmen’s products, sent the value of its shares skyrocketing. This was not the first time that Musk’s tweets caused confusion in the financial markets, as he contributed to the rise in the value of “Bitcoin” after addressing this digital currency.
His presence on Twitter has also caused him legal troubles in the past. He was forced to leave Tesla’s board of directors in 2018, after a confrontation with the American Stock Exchange Operations Committee, which accused him of misleading investors through his tweets about the possibility of “Tesla” withdrawing from the stock exchange.
Standard number for “Bitcoin”
As for digital currencies, the date of last February 8 was a pivotal station, as “Bitcoin” achieved new records, but this happened after “Tesla” announced electric cars, in a disclosure to the Stock Exchange, investing $1.5 billion in it during January 2021. .
Subsequently, the price of “Bitcoin” jumped about 7%, after the disclosure of “Tesla”, to $ 41,200, amid expectations of more rises for the well-known digital currency. Tesla said it may “acquire and hold digital assets from time to time or for the long term.”
Of course, Tesla’s move was not the first, as famous American universities have poured part of their billions of dollars into buying cryptocurrencies. And Bloomberg reported in January that Harvard, Yale, Brown, and Michigan universities had pumped part of their endowment funds into currency exchanges.
And the next day, February 9, “Bitcoin” rose to unprecedented levels above 48,000 dollars, a day after Tesla invested in it. Thus, the price of “Bitcoin” has risen 66.7% since the beginning of this year, up from 28,800 dollars at the end of the 2020 sessions.
Reducing the rank of the mask
But Musk’s solutions to the first place among the world’s wealthy did not last long. On February 22, his company’s shares fell 8.6%, which led to the erasure of about $ 15.2 billion from his net worth due to the recent decline of the “Bitcoin” digital currency that he invested in.
On that day, the biggest drop in Tesla shares occurred since September 2020, partially driven by Musk’s comments over the weekend, in which he said, specifically on February 20, that Bitcoin prices seem to be more than their value coincided with the currency’s decline. The most popular encrypted in the world.
Musk slipped to second place in the Bloomberg Billionaires Index of the world’s 500 richest people, with a net worth of $183.4 billion, down from a peak level of $210 billion in January. In contrast, Jeff Bezos regained the first place even as his fortune decreased by $3.7 billion to $186.3 billion.
Historic peak above 64 thousand dollars
On April 13, last, “Bitcoin” recorded a new peak above $ 60,000, recording $ 62,575, after it had previously exceeded 60 thousand for the first time on March 13, recording a record level at $ 61.78 thousand, following the signing of the President Joe Biden on the $1.9 trillion fiscal stimulus package.
The next day, April 14, Bitcoin jumped above $64,000, at an unprecedented price in cryptocurrency history, as the mood in cryptocurrencies turned to the upside, hitting $64,700.
Pay for cars with Bitcoin!
The negative impact of Musk’s previous statements to investors when he talked about it being overvalued, backfired on March 24, when he said that the company’s cars can now be purchased using the “Bitcoin” currency in the United States, provided that the service is provided. The same in other countries in the coming months of this year. “You can now buy a Tesla car with Bitcoin,” he wrote on Twitter on Wednesday. “Bitcoin paid to Tesla will be kept and will not be converted into fiat currencies.”
On the method of payment, Tesla’s website indicates that payment can be made from a customer’s Bitcoin wallet, either scanning a QR code or copying and pasting the Bitcoin address and the exact amount into the wallet.
Gambling with “Dogecoin”
On May 9, the “Dog Coin” digital currency fell by about 30% in less than 24 hours, after Musk described investing in the currency as gambling, while he had helped promote it, which pushed its value to record levels during the last period. .
Dogecoin, which is the fourth largest cryptocurrency by market value, reached a record level above 73 cents, on May 8, before retreating sharply, to lose at the beginning of trading the next day, about 30% of its value, recording About 51.4 cents.
The currency’s collapse came, according to the American “Bloomberg” agency, after Musk, the second richest person in the world, described it as “gambling” during his participation in the Saturday Night Live program, in which he played the role of a financial advisor trying to explain the concept of cryptocurrency.
Dogecoin, which started as a joke in 2013, has jumped more than 20,000% over the past year, according to CoinGeco. Musk was one of the biggest contributors to this rise, after he expressed his admiration for the coin that two programmers launched, with the aim of making fun of the cryptocurrency market, and many at the time considered it a “comic alternative” to the “Bitcoin” currency.
Gains fade
After the previously recorded peak, Bitcoin’s gains were fading, until on May 19 it lost all the gains it made after Tesla announced, on February 8, that it would use Bitcoin as a form of payment for its vehicles. Its price fell 12% to about $ 38,000, and to that date it has fallen by about 40% from its high near $ 65,000, which it recorded in April, down by $27,000 in one month.
Musk’s role in fueling volatility has emerged, with his social media comments sparking turmoil in the cryptocurrency community. Including that he hinted on May 16 in a tweet that his company “sold or is likely to sell its holdings in the digital currency amounting to $ 1.5 billion,” before returning on May 18 to publish another tweet in which he confirmed that he had not been sold “to date.” Virtual currencies in his possession, but the market did not respond to him.
