The crypto asset market is falling into a turmoil because of the remarks of Tesla founder Elon Musk.
On May 17, Musk first accused BTC of not being decentralized enough, and then in response to netizens’ speculation about Tesla’s dumping of BTC, he used the word “Indeed”, triggering market panic, and BTC fell over for a short time. 10%. However, at around 2 pm on the 17th, Beijing time, Musk responded to another netizen’s tweet that Tesla did not sell BTC, and the market instantly rose by 6%.
Bitcoin’s first move quickly spread to the entire crypto asset market, and the total market value of $2,180.8 billion has evaporated by 7.3% from the previous day.
For the first time in 10 years since Bitcoin has a price, there has been an individual who can influence the market in this way. Three months ago, Musk changed his Twitter signature to Bitcoin, and BTC subsequently rose sharply; recently, he posted a negative statement on BTC on this social platform, which caused the market to plummet. Musk was ridiculed by netizens as the first person to “Tweet Governance Coins”. Whether Tesla and Musk personally sell coins has yet to be verified.
After Musk’s remarks became the baton to control market sentiment, we at least saw the significance of the “hidden arena” of Bitcoin creator Satoshi Nakamoto. After a huge amount of traditional financial capital enters the free, crypto asset market without special regulatory rules, the influence of “Muskization” of large capital is worth thinking about.
Although the market value of crypto assets has reached 2 trillion US dollars, it is at most equivalent to an Apple company. Compared with the richness and maturity of the traditional financial market, the crypto asset market led by Bitcoin still has a long way to go.
Musk’s Twitter affects the rise and fall of BTC
Tesla founder Elon Musk continues to influence the crypto asset market through Twitter.
On May 17, Musk once again slapped BTC on Twitter. In reply to comments from netizens, he said that BTC is actually highly concentrated and most of it is controlled by a few mining companies. “There is a problem with the coal mines in Xinjiang. This resulted in a 35% drop in BTC computing power.”
This remark, combined with the previous news that “Tesla suspends accepting Bitcoin payments”, once again made the price of Bitcoin worse. Bitcoin was restored to $49,000 after the previous day’s sharp drop, because Musk’s remarks fell again.
During the market downturn, a Twitter user left a message to Musk, “If Tesla is found to have sold the remaining BTC positions, Bitcoin holders will definitely slap themselves in the next quarter.” The fatal thing is Musk. Replied to this tweet with the word “Indeed”. The news spread quickly, “Musk hinted that Tesla has sold Bitcoin positions” created a large-scale panic scene, Bitcoin fell to about 42,000 US dollars, down 14% from the previous day’s high.
Musk responded to Tesla’s BTC sell-off speculation with “Indeed”
The downturn of the “Coin King” caused secondary disasters, and most of the tokens fell along with it. The “second” Ethereum couldn’t hold it either. It fell to US$3,300, and the entire market was wailing.
However, Musk did not stop. At around 2 pm Beijing time on the 17th, he replied to a netizen on Twitter that “Tesla did not sell any bitcoin.” As soon as the voice fell, BTC rose in response, quickly pulling back from US$42,432 to above US$45,000, rising by 6% within half an hour.
The sentiments and wallets of investors in the crypto asset market are dominated by Musk’s tweets. Bitcoin has rebounded, but investors’ anger is accumulating. Some people are tired of Musk’s “capacity”, and some netizens leave messages. Because of his influence, he lost his family.
In the crypto community that advocates the spirit of decentralization, Musk has unparalleled influence on this market, and it has made many currency holders who respect the spirit of BTC fundamentalism embarrassed. Compared with Satoshi Nakamoto, the founder of Bitcoin who has retired actively for more than ten years, Musk has influenced the market through various unreasonable remarks, and has become a contemptuous force in the crypto community.
You know, two months before Musk’s continuous bad-mouthing of BTC, he seemed to have been the main supporter of BTC. On January 29 this year, Musk changed his Twitter signature to “Bitcoin”. On that day, BTC rose sharply by 16% from 32,000 U.S. dollars to a maximum of 38,000 U.S. dollars. On February 8, Musk’s Tesla announced that it would invest 1.5 billion US dollars to buy BTC, which once again pushed BTC upward; on March 24, Tesla officially announced that it would accept Bitcoin payments and added fuel to BTC to boost its breakthrough. The $50,000 mark.
During that time, Musk became the most influential evangelist for Bitcoin.
On April 24, when Tesla announced the sale of 10% of Bitcoin, some people thought it was a bad signal, but more people were immersed in the joy that Bitcoin was once again approaching $60,000.
Everything came off guard. On May 13, Musk said that Tesla no longer accepts BTC payments because it is “not environmentally friendly”; now, his reasons for slandering Bitcoin have increased by “not enough decentralization.” Musk’s tweets pushed BTC into a downward channel.
The market screams for “de-Muskization”
Many people use “Musk to succeed and Musk to fail” to describe his excessive intervention in the crypto asset market. Changpeng Zhao, the founder of crypto asset exchange giant Binance, even used Musk to express his protest.
In the eyes of investor Lucas, Musk’s accusation of insufficient decentralization of BTC appears to be a “layman”, because everyone who understands the Bitcoin mechanism knows that PoW (Proof of Work) is the underlying logic of the operation of the Bitcoin network. After the industrialization of mining, it has gradually become an economic model. Miners can come and go freely according to whether they are profitable or not. To date, no miner or mine has the ability to break 51% of the computing power. It is the best proof of Bitcoin’s decentralization.”
As for Musk’s proposal to expand the block of the DOGE network to increase transaction efficiency and lower the fee rate, it reminds many old people in the currency circle of Bitcoin’s fork wars time and time again. It is new knowledge, but for the currency circle, it is an old topic that has been realized.” Lucas said helplessly, “The currency circle lost because of the lack of reputation of KOL.”
Regarding the issue of “Bitcoin is not environmentally friendly” raised by Musk, people in the industry have already debated with it on Twitter. From the media Wu said that the blockchain pointed out that Musk’s claim that the total network computing power has fallen by 35% is unfounded. During the security inspection in Xinjiang, (the entire network’s computing power) dropped by up to 17%. At present, Sichuan’s computing power has been curtailed, and the entire network’s computing power has only dropped by 15%-20%. “Sichuan is mainly hydropower, and Xinjiang also has risks related to solar energy. Annual mining clean energy accounts for 40%, and high water periods can account for 60%-70%.”
Some people in the industry believe that this businessman who intends to develop Mars and also manages a listed company cannot buy 1.5 billion US dollars of BTC without knowing the logic of Bitcoin. “Now it seems that he is actually just a low price. Merchants who bought high and sold BTC were regarded as “gods” because of their fame during the BTC price increase.”
People continue to speculate on Musk’s motives for crypto assets. Just as Musk sang BTC with great fanfare, he continued to output his love for Dogecoin DOGE. But the interesting thing is that, like BTC, DOGE is also produced through PoW mining, which also consumes electricity and computing power for mining. Musk was therefore refuted as a “double standard.”
If DOGE is measured by the standard of “decentralization”, it is probably a lot worse than BTC. According to the data of non-small accounts on May 17, DOGE’s top 10 addresses accounted for 44.32% of the circulation, and the top 100 addresses accounted for 66.82% of the circulation; and the top 10 BTC addresses held the currency. It only occupies 5.16% of the circulation, and the currency holdings of the top 100 addresses account for 13.68% of the circulation. From the perspective of the proportion of currency held, the circulation of BTC is much more dispersed than that of DOGE.
Musk’s frequent face changes to BTC have compromised his credibility in the crypto asset market to a certain extent. Under his Twitter, some netizens said that Musk’s erratic attitude has brought great uncertainty, “I will sell Tesla stock and Dogecoin.” Some people simply persuaded him to reconcile him. Sla “Sell Bitcoin, don’t come back.” Someone even posted a token called “FUCK ELON MUSK”, which rose by 351% in one hour. Investors in the crypto asset market express their hatred of Musk in various ways.
For the first time in more than ten years since the creation of BTC, this market has been arbitrarily controlled by someone’s influence. The irony is that it is not Bitcoin creator Satoshi Nakamoto who controls it. He gave up his control and influence on Bitcoin in a “hidden arena” way.
When Musk criticized “Bitcoin is not decentralized enough,” he became the baton of “centralization.” Stakeholders are tired of his capriciousness, and are even more worried about whether the Bitcoin held by him and Tesla will fall down. According to calculations, Tesla owns only 0.23% of the circulation.
Tesla holds only 0.23% of BTC in circulation
Regardless of whether Musk’s remarks are intentional or unintentional, this has formed a metaphor. When the huge amount of Old Money enters this immature market, it will bring “institutional cattle” and at the same time will inevitably appear “Muskization.” crisis.
In the words of the early Bitcoin holder Lao Mao, “If one person can make Bitcoin jump up and down with a word, it only means that it is too small.”