Deutsche Bank analyst and Harvard University lecturer Marion Laboure, quoted the late Karl Lagerfeld Wednesday when she said:
“It took bitcoin (BTC) a mere three months to go from trendy to tacky, and all it took for the cryptocurrency to fall out of style was one tweet and a Chinese government statement.”
This statement came on the back of Wednesday’s market plunge, which saw bitcoin lose 22% of its value, hitting a three-month low of $32,129.
The world’s biggest cryptocurrency saw recent gains wiped out overnight, taking most all other major cryptocurrencies with it. This has been attributed to negative press from billionaire tweeter Elon Musk, as well as an announcement out of China.
China’s central bank, the People’s Bank of China, announced plans to enforce further restrictions on cryptocurrency trading, this week. These plans are an extension of pre-existing rules from 2017. The news came on the back of rising environmental issues surrounding bitcoin.
Bitcoin’s environmental issues have been brought to mainstream attention by Tesla’s CEO. Musk appeared on NBC’s Saturday Night Live two weeks ago, coining himself the “Dogefather.” Dogecoin (DOGE) plummeted in value immediately after this appearance, the avid tweet continued to affect markets after.
Tesla announced they would cease accepting payment in bitcoin, only several months after introducing this.
Despite the glum prediction that cryptocurrencies had suddenly become passé bitcoin, the rest of the market has recovered today. While Laboure alluded to the possibility of bitcoin continuing to rise and fall, she has glum predictions for its long-term potential. Attributing any recovery to the “Tinkerbell Effect,” i.e. bitcoin is entirely based on wishful thinking.