The recent episode following Elon Musk’s tweet backtracking his decision to accept Bitcoins as payment for Tesla Cars, has once again exposed the extreme volatile nature of the crypto markets. While it is nothing new in the cryptocurrency market, the extreme responsiveness to celebrity “tweets,” concerns average crypto investors who have to bear he brunt of such extreme changes in the prices.
Earlier in the year, Elon Musk had confirmed that his company Tesla would be selling cars for Bitcoins. It had puched the price of the leading cryptocurrency. However, out of the blue, yesterday Mr Musk announced that he has now dropped the plan to sell Tesla cars for bitcoins. While nothing has changed in regards to the “environmental impact” that bitcoin mining generates, it is only now that Mr Musk is citing environmental issues to backtrack on his decision.
However, all this leads us to a bigger question – is crypto market so fragile that it can be made to dance to the tune of some influencer’s tweets?
Not discrediting the merits of decentrlaized tokens, but the case in point is, undue influence of single entity does make investors vulnerable. Following Mr Musk’s u-turn, the crypto market lost over $300 billions. Bitcoin is once again below the $50,000 mark.
The event has sent shockwaves amongst crypto traders and investors. Experts have already started casting doubts about if Bitcoins will be able to bounce back. Musk picking and exploiting a drawback of the leading currency will definitely give more reason to its critics to discredit bitcoins.