Whoever says social media doesn’t influence financial markets hasn’t met Elon Musk.
The CEO of Tesla Inc. (Nasdaq: TSLA) … whether intentional or not … has been instrumental in the rise and fall of cryptocurrency prices over the last few months.
It’s causing a lot of whiplash among crypto investors.
The latest came on Sunday when popular crypto tweeter @CryptoWhale suggested Tesla could dump its position in bitcoin. Musk responded with one word: “Indeed.”
— Elon Musk (@elonmusk) May 16, 2021
Bitcoin values dropped more than 8% within hours of the post and, by Wednesday morning, bitcoin slipped below $40,000 — a 40% drop from its high of $63,000 reached only last month.
The tweet came days after Musk said Tesla would not accept bitcoin as payment for its popular electric vehicles.
The question now is whether cryptocurrencies remain a good investment or not.
This episode of The Bull & The Bear is all about cryptos. I provide some analysis of digital currencies like Bitcoin and Ethereum and tell you whether now is the time to invest in this volatile asset. I also examine crypto’s role as an inflation hedge and what I think is a better shield against rising costs right now.
The Damage to Bitcoin (and Crypto) Was Done
Following the damaging reply, Musk clarified that Tesla was not selling any bitcoin, but the damage was done.
Bitcoin Drops Below Previous 3-Month Low
Musk’s one-word reply to a tweet pushed the cryptocurrency below its previous three-month low.
It also caused a drop in cryptocurrency value across the board.
But Musk’s tweets aren’t the only thing pushing the already-volatile crypto market down.
The Peoples Bank of China said that digital tokens “cannot be used as a form of payment” on Tuesday.
In today’s podcast, I talk about how all of these factors are affecting cryptos and whether digital currencies are a solid investment right now.
The Bull & The Bear
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Research Analyst, Money & Markets
Matt Clark is the research analyst for Money & Markets. He’s the host of our podcast, The Bull & The Bear, as well as the Marijuana Market Update. Before joining the team, he spent 25 years as an investigative journalist and editor — covering everything from politics to business.