Musk’s remarks caused significant fluctuations in Dogecoin and Bitcoin. Is it suspected of market manipulation?

Musk’s actions and remarks about Bitcoin’s withdrawal continue.

Following Musk’s sudden announcement last week that due to the high pollution of Bitcoin from mining to trading, Tesla stopped paying for cars with Bitcoin. Last Sunday, a netizen prejudged, “Being a Bitcoin investor Detecting that Tesla will sell its bitcoin holdings in the next quarter, the former will be extremely regretful”, Musk gave a positive response.

This reply immediately ignited the fragile nerves of cryptocurrency. Bitcoin, which was already a downward channel, accelerated its sharp decline. The price of each coin fell below 43,000 US dollars, which was more than 6,000 US dollars from the intraday high, and it slid all the way to the lowest level since February this year. . Although the price of Bitcoin has rebounded after clarification by Musk, it has evaporated about US$20,000 compared with the US$60,000 per coin during its peak in April.

As of 20:03 on May 17, Beijing time, the price of Bitcoin was $45,661.75, a decrease of 7.11% within 24 hours.

Musk is ambiguous about Dogecoin and Bitcoin

The changes in the cryptocurrency markets such as Bitcoin last week were extremely “bright.”

“When Bitcoin investors notice that Tesla will sell its Bitcoin positions in the next quarter, the former will be extremely remorseful.”

On May 16, local time, a netizen with an account named “cryptowhale” said so on social media.

This seemingly unremarkable message book will not stand out among the many comments made by Musk’s group of Bitcoin supporters last week, but after Musk’s “really” reply, the market has exploded.

Bitcoin’s decline, which has always been dominated by Musk, has then increased. It has fallen below US$45,000 for the first time in the past three months, and has continued to fall below US$45,000 and US$44,000, setting the lowest price record since February this year, with a decrease of approximately 8%.

As of May 17, Musk made another statement to clarify, “Tesla did not sell any bitcoins to clarify.”

As a result, Bitcoin temporarily stabilized its downward trend.

This volatility happened after the sudden change in Tesla’s attitude towards Bitcoin.

On May 12th, local time, Musk said that Tesla would suspend the payment method of bitcoin for car purchases due to concerns about the large use of fossil fuels, especially coal energy, from the mining of bitcoin to the transaction process. The original words are, “We believe that cryptocurrency has great potential in many aspects, but this cannot be at the expense of environmental pollution. Tesla will not sell any bitcoins, and after it turns to a more environmentally friendly way , Tesla will restart Bitcoin transactions. At the same time, we are also looking for other cryptocurrencies that consume less than 1% of Bitcoin.”

Sure enough, the price of Bitcoin immediately plunged, and each price plummeted to around $50,000, a drop of 11%. The decline has continued to this day, during which time it broke through US$43,000 each.

Under the above-mentioned set of psychedelic operations, Musk’s attitude toward Dogecoin changed from left to right.

On May 8, local time, Musk launched a “popularization” of “Dogecoin” and the principles behind it in his first show “Saturday Night Live”. Isn’t it a scam?” After the rhetoric, the former suddenly admitted, “Yes, I think this is a scam.”

Dogecoin, which once rushed to a price of US$0.7376 per coin, quickly turned down, and the decline expanded all the way, from the highest point of the day at US$0.72 to US$0.41, a drop of 24.85% within 24 hours. Dogecoin enthusiasts panicked and went to leave messages under Musk’s account, hoping to get Musk’s blessing again. The expectations seemed to come true. Soon after the end of the late night show, SpaceX first stated that it would accept Dogecoin as an exclusive payment method for launching the lunar satellite DOGE-1. Musk then held an online public vote on “Whether you want to buy Tesla with Dogecoin”. More than 2.5 million fans participated, 77% of them expressed their willingness to pay for Tesla with Dogecoin. . Two consecutive rounds of operations have pushed up the price of Dogecoin, and the price of Dogecoin is currently hovering in the 0.496-0.502 range.

What provokes the nerves of Dogecoin fans even more is that only one day after Tesla announced that it would stop Bitcoin payment methods, Musk also claimed that he is working with Doge developers to improve transaction efficiency.

Interpretation of virtual currency trends

Tony Sycamore, a senior analyst at Jiasheng Group, explained to a reporter from 21st Century Business Herald that for novice investors, it is difficult for Bitcoin to surge thousands of times. Therefore, altcoins such as Dogecoin may become the next sustenance. Investors who have recently sold Bitcoin and exchanged into the “second in the currency circle” Ethereum are everywhere, and Dogecoin is also a popular choice.

Tony Sycamore believes that “Bitcoin’s dominance is difficult to be shaken. The cryptocurrency market is currently in a bull market stage. Therefore, various altcoins have generally risen, which in turn lowered Bitcoin’s market share. In the future, the market will enter a bear market stage. The share will increase again.”

In an interview with the 21st Century Business Herald reporter, Yu Jianing, the rotating chairman of the Blockchain Committee of the China Communications Industry Association and the president of Huobi University, pointed out that in view of the short-term Bitcoin price has risen sharply, it is accompanied by the “animal currency” The boom has caused a certain degree of market bubbles, and Bitcoin has cooled to a certain extent.

“The current market is in a period of intermittent allocation of crypto assets by traditional institutions, the listing of Coinbase is good, and the Fed is stalemate in raising interest rates. Except for Musk’s personal influence on Bitcoin and Dogecoin and other animal currencies, market hotspots are ebb. , The short-term impact is weak, so a temporary correction is bound to occur,” Yu Jianing said, “but in the medium and long term, the current crypto asset market may be at the corresponding stage in July and August 2017, and outsiders are not yet big. Large-scale entry. The real bull market was entered in May of this year. Over-the-counter funds continued to enter the market. The market sentiment was extremely excited, but at the same time, the judgment and selection of assets in the entire market were seriously divided. Therefore, the next few months may be a bull market. In the midfield, Bitcoin and other mainstream assets still have room to continue to rise, but only a small number of emerging assets can experience bulls and bears and become valuable assets in the future.”

Will Musk be suspected of market manipulation?

Obviously, behind Musk’s repeated seemingly “temporary intentions” remarks on the virtual currency market, is it really as his own explanation, “People who can send SpaceX to the moon like me, it is not surprising that he said so. “, or are there other human considerations? Did Tesla sell all of its remaining bitcoins? And does Musk operate on the Bitcoin he holds?

Back in time on April 26, local time, Tesla (Tesla Inc.) released a quarterly financial report showing that it bought 1.2 billion US dollars in bitcoin in the first quarter, while selling bitcoin earned 101 million US dollars. In the earnings call, Tesla’s Chief Financial Officer Zachary Kirkhorn reiterated his belief in the long-term value of Bitcoin and insisted on its commitment as a payment method.

In just over half a month, Musk has launched high-polluting speeches about Bitcoin. He is good at technology and has been active in the field of cryptocurrency for a long time. It should have been only recently that Musk suddenly realized the pollution caused by Bitcoin. If not, why did you “swear on oaths” in the first place?

But so far, no news about Musk’s personal Bitcoin holdings has flowed out.

Yu Jianing believes that the reason why Musk can have a huge impact on crypto assets such as Bitcoin and Dogecoin is the long-term desire of the crypto asset market to integrate into mainstream finance. “Whether it is Musk, or representatives of traditional financial capital such as Buffett, Charlie Munger, Bill Gates, their views on Bitcoin will have an impact on the confidence of the market as a whole. Compared to Buffett, Charlie Munger, Or Bill Gates. Their attitude towards Bitcoin has never changed significantly. Investors have psychological expectations. Only Musk has started to promote Bitcoin and Dogecoin on social media day after day this year. Using his identity as a social influencer to assign value to Bitcoin and Dogecoin, to drive retail investors who follow him to invest and even chase the rise.”

But a further question is, as the U.S. Securities Regulatory Commission (SEC) tightens cryptocurrency regulation, can its completely contradictory remarks under the SEC’s eyes be classified as market manipulation?

The SEC’s definition of market manipulation is deliberate deception, that is, to deceive investors by controlling or artificially influencing prices; or deliberately interfering with the free supply and demand of the market, thereby artificially guiding stock price changes. Market manipulation usually takes the form of pump and dump and hype and dump.

A lawyer told the 21st Century Business Herald reporter that market manipulation is unique to the securities market, and Bitcoin is not a security token. Under existing regulations, because the cryptocurrency field is not currently subject to SEC regulatory rules, Musk does not currently Constitute market manipulation.

“I think that there should be a professional organization to investigate whether he has the intention of manipulating the market and that he can actually make a profit in this way. If in the future an institution finds evidence that Musk deliberately manipulated the market and made a profit, Musk is very It may be punished by U.S. securities regulators. There are precedents of celebrities in the United States who have been punished for “calling orders” for certain crypto assets.” Yu Jianing said.

Matt Weller, head of global research at Jiasheng Group, told the 21st Century Business Herald that for Musk, sing a lot of cryptocurrencies overwhelmingly and may be targeted by regulators. “After Musk sang Dogecoin, he was supervised to go’drink tea’, and for a while he also disabled social media. Musk started to converge from this. The most important thing is that at this stage, Musk needs Pay attention to the opinions of large institutional investors, and the behavior of speculating on Bitcoin has disgusted many institutions.”

Matt Weller also believes, “The reason why Tesla has a high ESG rating is because of the help of the’clean technology opportunity’. Perhaps Musk does not want Bitcoin to hold back. Technically, Tesla’s stock price is positive. Trading in the vicinity of the lower rail of the continuous half-year interval, the potential support levels are at the 200-day exponential moving average 580, the previous support level 540, and the support level 500 transformed from resistance.

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