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Seems like Elon is losing his charm on Bitcoin and other cryptocurrencies
Bitcoin continues to remain one of the most significant cryptocurrencies in the world, even after its drastic portrayal of volatility that dragged down the entire cryptocurrency market. Initially, Elon did not portray much interest in buying or investing in Bitcoin. But eventually, cryptocurrencies grew on him and the Tesla CEO decided to stock up on BTC holdings. Early in February 2021, he announced that Tesla bought US$1.5 billion worth of BTC tokens. This enabled the cryptocurrency to go through the roof and aided its price to create historical highs by the end of the year! This is majorly known as the ‘Elon Musk’ effect on cryptocurrencies. Not just Bitcoin’s price, Elon majorly impacts Dogecoin price too. So much so, that a DOGE investor sued Elon Musk under the pretext that he impacts the Dogecoin price for his profits. But such accusations did not deter him from his propositions, and he continues to support Dogecoin. But experts believe that Elon’s effect on cryptocurrencies is fading and we might have just witnessed its example.
Global carmaker Tesla, recently offloaded around 75% of its BTC holdings that it brought back in February 2021. The US$2 billion worth of BTC holdings were then converted into fiat currency, adding more than US$900 million to Tesla Inc’s balance sheet. As per reports, Elon has enunciated that Tesla’s initiative to sell off BTC holdings should not be considered as his verdict and opinion about investing in BTC. He has confirmed that major tech companies initiate such processes to increase their cash position, given the uncertainty around the economic and financial markets.
Experts around the world concluded that Elon’s current initiatives might result in another bearish downfall for Bitcoin. The BTC price was rallying up past US$23k, but after this initiative, its value declined to US$21k. Its value soon recovered, and currently, at the time of writing this article, the BTC price is rallying up US$22k.
So, is Elon losing his effect?
\It does seem that way, or maybe the crypto market is renewing its functionalities. It is quite obvious that Tesla’s announcement came at a time when the market was experiencing a new period of hype. After a period of prolonged slumber, the market rallied. Experts believe that it was mostly after Tim Beiko announced the probable launch of the Ethereum Merge upgrade. The continued adoption of Bitcoin, Ethereum, and several other altcoins also aided in this price rally.
Since cryptocurrencies are fairly volatile assets, Elon Musk’s impact on these assets might be quite literal. Elon’s tweets tend to impact the price movement of digital assets but buying and selling cryptocurrencies solely depend on rational investment decisions, solely taken as per their financial preferences and market conditions.