Does Elon Musk Still Matter to Crypto?

Elon Musk’s Tesla revealed it has sold 75% of the bitcoin (BTC) it had on hand in earnings reports on Thursday. The corporation initially announced purchasing the BTC in early 2021, and it looks to have made a tiny profit on those transactions.

Tesla’s initial acquisition of $1.5 billion worth of bitcoin was big news at the time and sparked a month-long increase in the price of BTC of more than 60%.

But the news that Tesla was selling off its tokens did not appear to have a correspondingly detrimental impact on the price of Bitcoin or the mood of the market. Since Tesla announced the sales, bitcoin has actually risen a little bit in value.

That could be attributed to Tesla’s presentation of the BTC sale. Musk highlighted the transaction “should not be taken as some verdict on bitcoin” during the company’s most recent quarterly earnings call, stressing that it was largely a strategy to free up funds in anticipation of a potential economic collapse.

When Tesla made its initial announcement, there was a lot of building enthusiasm surrounding cryptocurrencies, and many new investors were probably readily convinced by the actions of a well-known tech millionaire.

The remaining holders are more likely to be firmly committed to bitcoin’s fundamentals and less bothered with the decisions of one wealthy man after the deflation of a significant crypto credit bubble and bitcoin’s price plunging by roughly 60%.

It’s also true that, despite this year’s protracted decline, the state of bitcoin and cryptocurrency in general is very different from where it was 18 months ago.

Despite the usual abundance of scams and junk produced by the two-year hoopla around cryptocurrencies, it has also significantly improved development, awareness, and adoption, including El Salvador’s problematic but crucial bitcoin experiment. Tesla’s sale announcement is battling a budding bull narrative because, while there are no assurances, the market currently appears to have reached at least a temporary bottom.

Regarding cryptocurrencies, Elon Musk spent years tweeting about dogecoin (DOGE), a troll that may have been around from the start but resulted in a $285 million lawsuit against him when DOGE plummeted this year as predicted.

The icing on the cake, of course, has been his oddly clumsy attempt to buy Twitter, followed by attempts to back out.

While Tesla continues to fall short of the goal of “full self-driving,” those who are genuinely paying attention to Elon Musk’s businesses may have noted that the much-anticipated Cybertruck has been delayed, even as traditional manufacturers make significant inroads into the electric vehicle market. Like a big section of the market, Tesla stock has given back a significant amount of its 2020 gains.

Elon Musk’s ridiculous and destructive promotion of dogecoin has made it abundantly evident to crypto professionals that he either doesn’t comprehend the purpose of bitcoin or, at best, doesn’t care all that much.

Despite all the warnings about raising funds, Elon Musk isn’t someone you should turn to for advice on cryptocurrencies, as confirmed by Tesla’s bitcoin sale. Simply put, he is a particularly boisterous, impulsive, and unpredictable follower.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Patrick

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