Written by konex on 28 May 2021
It has been said many times - the cryptocurrency market has an “Elon Musk Problem.”
Any asset class, regardless of what it is, should not be influenced by a single party as much as the cryptocurrency market has over the past few months. However, crypto seems to have moved up or down depending on what Elon decides to tweet.
It can be difficult to know what moves the cryptomarket at the best of times, but high-profile individuals such as #ceos of securities firms, hedgefund managers, billionaires and celebrities certainly play a role in impacting market prices. Arguably Elon Musk is more influential than most seeing as Tesla purchased USD $1.5bn bitcoin earlier this year and is also very active on social media on the topic.
The entire cryptocurrency market is currently valued around USD $1.6tn, and has its moments of volatility, but the influence that Musk wields could be seen as dangerous for retail investors in particular. This ‘danger’ could attract unwanted attention from US regulators and lead to overregulation, which could stifle the industry.
With the price crashing last week, a lot of new investors and weak hands were shaken out of the market. While this happened, large investors used this opportunity to acquire USD $3bn of bitcoin, and there is more investment coming. One example is Billionaire Carl Icahn looking at investing USD 1.5bn in the crypto currency market.