The value of Bitcoin dropped more than 10%, dropping below $ 46,000 for the first time in almost three months. The downfall began after Tesla founder Elon Musk hinted that the company could sell its Bitcoins.
The fall also triggered a decline in the market capitalization of Bitcoin to $ 823.8 billion, or 40.11% of the total capitalization of all cryptocurrencies. At its peak, Bitcoin’s capitalization was $ 1.184 trillion. Over the past seven days, the cryptocurrency has lost 25.75% in price.
We will remind, the head of the cryptocurrency platform Delta Pankaj Balani admitted that in the near future the price of Bitcoin may fall below $ 50,000. Against the background of reducing the number of “whale” addresses to a minimum since the beginning of the year.
Following Bitcoin, several other cryptoassets fell in price: Ethereum price fell to below $ 3480 (-10.5% per day). The BNB token of the Binance exchange dropped to $ 525.
Musk’s influence on the Bitcoin rate
Bitcoin fell after Elon Musk tweet allowed the sale of Tesla-owned Bitcoins. In response to a reply from one of the users on Twitter that in the next quarter BTC holders may be disappointed when they learn that Tesla got rid of its remaining Bitcoins, the billionaire wrote: “Indeed”. Musk later clarified that so far Tesla has not sold a single Bitcoin.
Musk has been a big proponent of cryptocurrencies, driving their prices up both last and this year. In a February SEC statement, Tesla said it had bought $ 1.5 billion worth of Bitcoin. The company later said it recorded $ 101 million in net income from Bitcoin sales during the quarter, helping to boost its net profit to a record high in the first quarter.
Musk’s tweet about the possible sale of Bitcoins came days after the Tesla founder said the company plans to hold, not sell the Bitcoins it already has. And intends to use them for transactions as soon as mining moves to more sustainable energy. At the same time, Musk said that the company refuses to accept payments for electric vehicles in BTC for environmental reasons. Too much energy is spent on their production, produced using coal, the most harmful type of fossil fuel for the atmosphere.
Why is a billionaire dropping Bitcoin, despite the fact that both he and his company express an interest in it? Elon Musk loves to shock the public. It is not the first time that he has been seen manipulating the cryptocurrency or stock market in one way or another.
His tweets have caused market reversals many times. For what purpose Musk is doing this, it is difficult to say.
Musk has a lot of information that is inaccessible to ordinary investors. Therefore his words are so keenly perceived by the market. Investors rightly believe that he speaks for a reason, but sets the trajectory of the movement of assets based on the information he has.
Institutions are accumulating
Market sentiment for cryptocurrencies has deteriorated in recent days. While institutions continue to accumulate Bitcoins, offering strong evidence that the bull market is far from over. Consequently, there is still high potential for a return to growth.