Bitcoin Stabilizes After Tumultuous Period of Musk Tweets

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In Brief
  • Bitcoin stabilized around $45,000 after Tesla CEO Elon Musk clarified the firm would not be selling its holdings.

  • Musk had previously claimed Telsa already sold a portion of its BTC.

  • Other Musk tweets trolled on bitcoin bulls and further condoned Dogecoin.

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Bitcoin stabilized around $45,000 after Tesla CEO Elon Musk clarified the firm would not be selling its holdings.

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“To clarify speculation, Tesla has not sold any Bitcoin,” Musk tweeted just before 8 AM CET on May 17. The tweet was a reply to Bitcoin Archive, which bemoaned the effect of Musk’s tweet the day before on the price of Bitcoin.

The speculation started roughly 12 hours before on May 16, with a tweet from Twitter handle @CryptoWhale. “Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their #Bitcoin holdings. With the amount of hate @elonmusk is getting, I wouldn’t blame him.” the tweet read. Musk replied with a one-word response — “Indeed.”

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According to Bloomberg, this may have been the catalyst that caused bitcoin to slip as low as $42,000, its lowest 2021 price since February.

Musk tweets reignite Bitcoin debates

Although these likely had the most impact on the markets, Musk had a slew of other tweets over the weekend. Earlier, on May 16, the CEO of fellow Bitcoin holding MicroStrategy, Michael Saylor, tweeted a video extolling the environmental merits of Bitcoin. Musk replied to the tweet, trolling the CEO as “Saylor Moon.”

Next, Twitter user Peter McCormack criticized Musk in a tweet, calling him out for being a troll. “The perfect troll is one where people don’t know whether it is a troll or not. Your recent poorly informed criticism of bitcoin and support for DOGE may be the perfect troll…or you might actually believe this (God I hope not),” he tweeted. Musk replied that “Obnoxious threads like this make me want to go all-in on DOGE.”

Twitter handle @itsALLrisky tweeted, “Elon is choosing $DOGE because Dogecoin is better than Bitcoin in many fundamental ways.” The tweet continued saying, “Dogecoin has faster transaction speeds, lower fees, and less environmental impact than BTC.” Musk replied saying “Ideally, DOGE speeds up block time 10X, increases block size 10X, and drops fees 100X. Then it wins hands down.” This reignited an age-old debate about cryptocurrency scaling.

Musk’s previous week

All these tweets came after an already eventful week for Musk. Earlier in the week, Musk announced that Tesla would no longer be accepting Bitcoin due to environmental concerns. This had triggered Bitcoin’s initial tumble last week.

On May 8, Musk hosted “Saturday Night Live” and joked about Dogecoin. Although he had previously contributed to its skyrocketing price, Dogecoin actually fell during the broadcast. Just days after that, he tweeted that he was working with Dogecoin developers to improve its transaction efficiency.

Although Musk has been tweeting about cryptocurrencies for years, his voice became legitimately authoritative once Tesla bought $1.5 billion in bitcoin in February 2020. The next month he had announced that Tesla would accept Bitcoin as payment, an initiative that he has now rescinded.

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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