In the good old days, many used to say, “If Dhirubhai Ambani sneezes, the market will fall!”
Today, we think we are much better off but are we really?
The Bitcoin market is murky and frothy and seems to be running on the whims and fancies of one individual – Elon Musk. If he puts up a sad emoji, the bitcoin loses some 20% and if he puts up a happy one, the market rises 20%. So, the entire bitcoin ecosystem seems to be now running on the back of one person’s emotions alone. How is that in itself good?
Like on Friday, the bitcoin prices fell after Elon Musk posted a tweet suggesting he’s fallen out of love with the world’s top cryptocurrency. He tweeted a meme about a couple breaking up over the male partner, quoting Linkin Park lyrics, adding the hashtag #Bitcoin and a broken heart emoji.
This was followed up on Sunday, with his tweet, “Goods & Services are the real economy, any form of money is simply the accounting thereof."
And this is not the first time this has happened – in May, thousands lost their entire money when Musk tweeted that Tesla would stop accepting bitcoin as a payment method due to concerns over its energy usage. This one tweet, shaved off billions of dollars in value from the entire crypto market in a single day.
Prior to that, he was all rave reviews – couple of days before, in the same month of May, he had tweeted, “working with Doge devs to improve system transaction efficiency. Potentially promising.” On a TV program, ‘Saturday Night Live’ he had called the digital coin a ‘hustle.’
Well, we are no supporters of bitcoin do feel that it is more of a gambling den where the gullible are trapped. But at the same time, for Musk to be so irresponsible with his utterances and rantings on Twitter is simply not right. Making the entire bitcoin market to look like a big joke, Musk is showing us how shallow the market really is, resulting in wild moves in its price. Yet, when he knows that he is such a huge influencer, its simply morally wrong on his part to say things which causes so many to lose immense amounts of money.
To look at this from the other side – the stock markets too, at one point of time, during its nascent stages was shallow, where a sneeze or uttering led to a crash or a boom. Its only after years of regulations and corrections, as more and more quality got added and more people participated that the stock markets got its depth. Today, the markets will not fall if the top CEO of the country falls ill or if he tweets something irresponsible. And maybe, over a period of time, the bitcoin market, young and volatile, will stop reacting to such tweets.
Bottomline – beware of both Bitcoin and Musk, as both have their own agenda!