Elon Musk’s tweet sparked an unprecedented industry wide sell-off that impacted nearly all major assets, and the crypto sector is yet to start recovering. Bitcoin has dropped $7,000 in the last 24 hours, to a three-month low of $42,000.
For perhaps the foremost time since April, the entire crypto market cap has fallen under $2 trillion, thanks to a sharp drop in Bitcoin’s value.
Many traders’ positions have been forced to liquidate as a result of the decline, according to statistics from Bybt, which shows that more than $2.4 billion has been diluted during the past 24 hours.
Ethereum, an altcoin, was heavily impacted, falling from an all-time peak of over $4,300 to a new price of $3,500.
Elon Musk has played a major part in the most recent decline, since his unfavourable comment regarding Bitcoin sparked a sell-off in the cryptocurrency sector. It all started past week when Elon Musk, the founder of SpaceX, revealed that Tesla would no longer allow Bitcoin as mode of payment for its electric vehicles. Furthermore, Elon Musk said that cryptocurrency is not eco-friendly.
“There is a rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
The potential of Bitcoin as a safe haven has been challenged by Peter Schiff, the chief economist and market analyst at Europac. Purchasing cryptocurrency, he believes, should be treated as gambling rather than an investment. Schiff also challenged Bitcoin’s monetary standing, highlighting that a single tweet could devastate the commodity. The global adoption of cryptocurrency as money is reported to be a long time away off, with market fluctuations cited as a major sticking point.
If a single @elonmusk tweet can have so much influence over the price of #Bitcoin how can anyone seriously consider it to be money? How can Bitcoin be a safe-haven asset if a one-word tweet puts it at risk? It should be clear by now that buying Bitcoin is gambling, not investing.
— Peter Schiff (@PeterSchiff) May 17, 2021
Investors have stayed upbeat notwithstanding the decline. Following Elon Musk’s post, PlanB conducted a Twitter survey to gauge crypto investors’ expectations for where Bitcoin could well be traded by the end of 2021. Respondents were invited to predict whether the hallmark cryptocurrency will finish the year with a value of $500,000, $288,000, $100,000, or less than $100,000.
Surprisingly, 44% of the 51,361 respondents think the price would exceed $100,000. On the contrary, 25.2% of those surveyed anticipate Bitcoin to trade under $100,000 by the end of 2020, while 22.5 % foresee it to trade over $288,000. Just 8.3% believe Bitcoin will reach $500,000 by the end of the year.
So .. with @elonmusk aiming to destroy #bitcoin .. do you think BTC will reach $500K, $288K (S2FX model) or $100K (S2F model) before December 2021 .. or will BTC stay below $100K?
— PlanB (@100trillionUSD) May 17, 2021
