Subscribe
E-Paper
 |
| SpaceX owner and Tesla CEO Elon Musk grimaces after arriving for the Axel Springer award, in Berlin, Germany, Dec. 1, 2020. REUTERS/Yonhap |
By Anna J. Park
Bitcoin and altcoin prices fluctuated once again on Monday (KST) as Tesla CEO Elon Musk sent a series of tweets on late Sunday and early Monday, triggering a plunge of bitcoin and other altcoins, followed by a slight rebound on Monday.
The nosediving of the cryptocurrencies started on late Sunday, as Musk sent a tweet hinting that Tesla may have dumped its bitcoin holdings.
On Sunday afternoon, local time, Musk replied "Indeed" to a tweet that said "Bitcoins are going to slap themselves next quarter when they find out Tesla dumped the rest of their Bitcoin holdings." His short response hinted that Tesla may have sold all its cryptocurrency assets. The one-word tweet sent a global shockwave to the cryptocurrency market, which had already been faltering amid recent heightened volatility.
 |
| Elon Musk's reply on Twitter on Sunday afternoon / Courtesy of Twitter |
Bitcoin's price fell by 9.63 percent over a 24-hour period, as the major cryptocurrency was traded at $43,746.48 at 2 p.m. on Monday, Korea time. Ethereum, the second-largest market cap coin, also nosedived by 12.31 percent over the 24-hour period, as it was traded at $3,325.45 at 2 p.m. Monday. Dogecoin, for which Musk expressed his fondness calling himself "The Doge Father," fell to $0.4819, an 8.95 percent fall from the previous day.
However, the Tesla CEO tweeted once again on early Monday local time, or 2:56 p.m. (KST), that "To clarify speculation, Tesla has not sold any Bitcoin." In less than an hour after that tweet, global coin prices showed a slight rebound. Bitcoin's price gained a boost to $44,690.30 as of 3:40 p.m., while Ethereum and Dogecoin also rose to $3,408 and $0.489, a slight increase from an hour earlier.
 |
| Elon Musk's tweet on Monday / Courtesy of Twitter |
Elon Musk's seemingly fickle stance has wielded much influence on the global cryptocurrency market lately, particularly since Tesla's surprise announcement in early February that it would start accepting bitcoins for payment of electric vehicle (EV) purchases. At that time, the EV company also announced that it bought $1.5 billion worth of bitcoins.
As Tesla joined the list of crypto-favoring companies including Square and PayPal, bringing legitimacy to the actual use of the cryptocurrency in payment systems, Bitcoin went on a strong bullish move. Its price skyrocketed by more than 41 percent in just over two and a half months from $38,817 on Feb. 7 ― the day before Tesla's bitcoin purchase was made public ― to $55,046 on April 26, when the EV company made another announcement that it had sold about 10 percent of its Bitcoin holdings, garnering $101 million in profit.
Musk tweeted again late last week that Tesla has suspended vehicle purchases using Bitcoin due to concerns over the increased combustion of fossil fuels for Bitcoin mining, causing more than a 17 percent fall in the price of the cryptocurrency.
 |
| gettyimagesbank |
'Both sides are open' in short-term cryptocurrency asset market
Despite Musk's short-term impact on the digital asset market with his capricious social media messages, market experts remain cautious in their stances over the future of coin investments. They say while "both sides are open" in the coin market in the short term, the crypto market is now unlikely to vanish owing to its tech innovations.
"The cryptocurrency market already experienced a huge correction period a couple of years ago, followed by the hike starting last year. The recent rise in the digital asset was attributed not only to the participation of institutional investors, but also the development of blockchain innovations such as DeFi protocols, which allowed investors to earn by yield farming," a local crypto expert told The Korea Times on condition of anonymity.
He forecasts that short-term corrections are likely, yet views Musk's influence on the highly volatile asset would be limited in the long term.
Twitter and Square CEO Jack Dorsey, who's a big-time bitcoin optimist, also said that "no single person or institution will be able to change" Bitcoin in a recent tweet, reaffirming Square's commitment to Bitcoin payments.
"Although no one's certain about Musk's full intentions, it seems his recent stance reflects globally heightened requirements in ESG-principled investments, as well as his search to find more efficient digital assets in terms of payment," SK Securities crypto analyst Han Dae-hoon said.
