Bitcoin (BTC) went on a nosedive below $50,000, sinking approximately $8,000 in just a couple of hours due to the tweeted concern of Elon Musk that the cost of the digital asset has risen too much too swiftly. The asset fell over 17% on the previous trading day and is under about 5.6% today.
Elon Musk and Bitcoin Price Movements
Earlier this month, Elon Musk, the CEO of Tesla, tweeted about the digital asset and embraced Bitcoin, which ultimately led to a surge in BTC prices.
After the tweet, the crypto market looked totally in favor of Bitcoin and helped it reach $58,000.
Mati Greenspan, the founder of Quantum Economics, associated the richest man’s influence over the digital asset’s price movements to Warren Buffet. He stated:
“Elon and his fleet have incredible power over market prices.”
Moreover, Janet Yellen, Treasury Secretary, released a stark warning about Bitcoin on Monday at a New York Times conference. She said:
“The token is an extremely inefficient way of conducting transactions.”
Bill Gates, the founder of Microsoft Corp., revealed in an interview with Emily Chang from Bloomberg Television that he is not a Bitcoin supporter for two reasons.
First, it is not suitable for the environment as it uses a lot of energy. Second, he is not a fan of Bitcoin for any individual investor whose name is not Elon Musk. He stated:
“Elon has tons of money and he’s very sophisticated so I don’t worry that his Bitcoin will sort of randomly go up or down.”
He continued:
“I do think people get bought into these manias who may not have as much money to spare, so I’m not bullish on Bitcoin, and my general thought would be that if you have less money than Elon you should probably watch out.”
Individual Traders and Market Volatility
It is considered that the prices of the digital asset fell on Monday because of the institutional crypto traders responding to Elon’s tweet that BTC and ETH prices are high.
JPMorgan Chase and Co. strategists have lately warned about the declining liquidity of Bitcoin. Nikolaos Panigirtzoglou, a strategist at JPMorgan, wrote in a note which read:
“Liquidity for the digital coin was lower than that for the S&P 500 Index and gold, meaning even small flows can have a large price impact.”
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