Bitcoin price drifted below $50,000, losing about $8,000 in just a few hours due to the tweeted concern of Elon Musk that the price of the digital asset has risen too much too quickly. The asset plunged over 17% on the previous trading day and is down about 5.6% today.
Elon Musk and Bitcoin Price Movements
Earlier this month, Elon Musk, the CEO of Tesla, tweeted about the digital asset and embraced Bitcoin which eventually led to a surge in BTC prices. After the tweet, the crypto market seemed totally in favor of Bitcoin and helped it reach the mark of $58,000.
Mati Greenspan, the founder of Quantum Economics, compared the influence of the richest man in the world over the price movements of the digital asset to Warren Buffet. He said:
“Elon and his fleet have incredible power over market prices.”
Furthermore, Janet Yellen, Treasury Secretary, released a stark warning about Bitcoin on Monday at a New York Times conference. She said:
“The token is an extremely inefficient way of conducting transactions.”
Bill Gates, the founder of Microsoft Corp., revealed in an interview with Emily Chang from Bloomberg Television that he is not a supporter of Bitcoin for two reasons.
First, it is not good for the environment as it uses a lot of energy. Second, he is not a fan of Bitcoin for any individual investor whose name is not Elon Musk. He said:
“Elon has tons of money and he’s very sophisticated so I don’t worry that his Bitcoin will sort of randomly go up or down.”
“I do think people get bought into these manias who may not have as much money to spare, so I’m not bullish on Bitcoin, and my general thought would be that if you have less money than Elon you should probably watch out.”
Individual Traders and Market Volatility
It is believed that the prices of the digital asset fell on Monday because of the institutional crypto traders responding to Elon’s tweet that BTC and ETH prices are high.
JPMorgan Chase and Co. strategists have recently warned about the declining liquidity of Bitcoin. Nikolaos Panigirtzoglou, a strategist at JPMorgan, wrote in a note which read:
“Liquidity for the digital coin was lower than that for the S&P 500 Index and gold, meaning even small flows can have a large price impact.”