About a week and a half ago now, Elon Musk, the CEO of Tesla, and one of the wealthiest individuals in the world appeared on SNL, where he referenced his favorite crypto, Dogecoin (DOGE/USD). Two days later, Musk’s company, Tesla, announced that it will no longer accept BTC payments for electric cars due to the fact that mining it has a big, negative impact on the environment.
Ever since then, the community has been engaged with Musk, and BTC/USD prices started to crash, going down by over 30% in one week. But, is it truly Musk’s fault?
Jill Carlson: Why did Tesla give up on Bitcoin payments?
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In a recent interview, Slow Ventures venture partner, Jill Carilson, gave her view on why Tesla turned its back to BTC. Yes, BTC mining consumes a lot of energy, and it is not very environmentally friendly. Meanwhile, Tesla is a company that sells electric cars, so that it would reduce the carbon impact.
As such, it cannot use BTC and stay true to its views. This is also important to funds, portfolios, and others who support it, and not to mention its relationship with the US government. Carlson believes that the so-called ‘Musk Effect’ is not real. Things simply aligned in the way they did, so it appears that Musk holds massive sway over the crypto market when in reality, he does not.
Meltem Demirors agrees: One-word tweets are not what moves the market
Alongside Carlson, Meltem Demirors — Coinshares’ chief strategy officer — also commented on what is going on. She said that Coinshares focuses on data, rather than tweets, and the data showed skittishness of macro markets on Friday, just before Musk’s SNL appearance. There were equity and stock sell-offs, the tax season had a big impact, and alike.
Meanwhile, BTC surged by 300% since the start of the year, and with that in mind, it is normal to see 25%-40% corrections and pullbacks. Furthermore, she said that the majority of sell-offs over the last week came from new holders — people who do not have a lot of experience with crypto and the way the prices move, who panicked when the prices went down and started selling massively.
Even the order books have seen the domination of short positions, as many were expecting the correction. Demirors also added that there has been a massive inflow of funds into Ethereum (ETH/USD) and other assets, while a lot of this money came from Bitcoin. In the end, she is also convinced that tweets, even when coming from Musk, are not powerful enough to have this big of an impact on any market.