At the time of press, Bitcoin prices had lost 10% on the day and were trading at $43,300. Ironically this is very close to the price BTC hit after Tesla announced its $1.5 billion purchase of the asset in February.
Bitcoin was trading at just over $50K at the beginning of the weekend, however, by early trading on the Asian session on Monday morning, it had lost a further 16% dumping as low as $42K briefly.
Since its all-time high on April 14, BTC has corrected 35% making this the fifth and largest correction of the current market cycle. Things are now in danger of heading into a full bear market if BTC fails to hold above $40K.
The massive downturn appears to have been instigated by one man and the implication that his company may have sold its BTC holdings.
Musk’s Massive Bitcoin U-turn
On Sunday, anonymous crypto commentator ‘CryptoWhale’ suggested that Tesla had sold its Bitcoin holdings to which Elon Musk simply replied “indeed”.
What followed was a massive Twitter brawl where Musk grew increasingly riled and repeatedly took swipes at Bitcoin, the crypto community in general, and even prior allies such as MicroStrategy CEO Michael Saylor.
With wild commentary like comparing crypto to PayPal while still shilling Dogecoin, it seems that Elon Musk has lost all credibility in crypto circles at least.
The Tesla CEO appears to have done a massive u-turn after investing in Bitcoin, then allowing it to be used for payments for vehicles. He has now single-handedly caused the entire crypto market to crash.
It’s worth noting, however, that Musk clarified that Tesla hasn’t sold any of the bitcoins they hold yet, debunking some speculation going in the community.
Gold investor and perpetual Bitcoin detractor Peter Schiff couldn’t resist sticking the boot in as markets tumbled.
If a single @elonmusk tweet can have so much influence over the price of #Bitcoin how can anyone seriously consider it to be money? How can Bitcoin be a safe-haven asset if a one-word tweet puts it at risk? It should be clear by now that buying Bitcoin is gambling, not investing.
— Peter Schiff (@PeterSchiff) May 17, 2021
Schiff does have a valid point that a single tweet (or flurry of angry ones) should not have such an impact on markets as a whole. However, what Schiff failed to point out was that any investment is effectively gambling – the only thing that changes between assets is the risk factor.
Bitcoin’s fear and greed index has plunged to its lowest levels since the weeks following the massive pandemic-induced market crash in March 2020 that sent BTC prices tumbling back to $5,000.