Recently, Bitcoin holders have been on edge. The crypto market is extremely sensitive to comments by Elon Musk on the flagship cryptocurrency. In late May, Bitcoin tumbled nearly 30% since it had leapt to $64,829 per token in April, the highest ever recorded price. Crypto investors are worried that Tesla CEO could decide to sell the corporate Bitcoin holdings worth $1.5 billion. At the historic peak of its value, the most popular digital token appreciated almost 1,500% since March 2020. Bitcoin traded with high volatility for the most part of May. In late May, it sank below $50,000 in light of Elon Musk’s tweet. Tesla leader announced that the company would not accept payments for electric cars in Bitcoins anymore. The high-tech mogul calmed down traders saying that the digital tokens worth $1.5 billion purchased earlier would be held as corporate investment.
Nevertheless, market participants take his dubious remarks with a pinch of salt. Experts estimated that Bitcoin investors could incur huge losses if Tesla CEO decides to sell his Bitcoins. Later, Elon Musk confirmed that his company had not sold a single BTC token and did not consider this move for the near future.
Tesla and SpaceX CEO confesses that he is a fan of the flagship cryptocurrency and Dogecoin which has been actively promoted thanks to his involvement. He even admits that a new cryptocurrency could be developed unless Dogecoin lacks vitally important features with further upgrades. Earlier, Elon Musk expressed a wish for Dogecoin developers to boost a speed and a block size 10 times and to slash a transaction commission 100 times.
Experts warn that traders should be braced for a roller coaster in the whole crypto market. Digital tokens have always been viewed as highly volatile assets for obvious reasons: decentralized trading floors and the lack of government regulation. Amid buoyant demand for digital currencies, their prices have been soaring accompanied by robust speculative activities. At the same time, cryptocurrencies are vulnerable to a variety of manipulations. Verbal interventions of well-known people on social media are the strongest market catalysts.
There are profound differences between the traditional stock market and the crypto market. Trading in all crypto platforms is not supervised by any financial watchdog whereas any activity in traditional markets is closely monitored by the US Securities and Exchange Commission (SEC). Any scam spotted by the Commission entails a severe penalty from a hefty fine to a jail sentence. Sadly, the crypto market is not subject to the securities legislation, though authorities in many countries are keen to crack down on the crypto industry. Therefore, retail crypto investors should be extremely cautious.
