Musk's words caused a bloody storm in the cryptocurrency market.
Dogecoin soared 260 times in half a year, Shiba Inucoin soared 10,000 times in 30 days, 100,000 times in 3 months, and another altcoin CSPR soared 2,213 times in one night. The madness of the cryptocurrency market makes people sigh: "One day in the cryptocurrency world is like ten years in the human world."
With the mentality of "getting rich overnight", many people could not help but rush into the cryptocurrency circle. However, huge risks are coming. Musk announced that Tesla will stop accepting Bitcoin as a payment method because of concerns about the environmental problems caused by mining.
The above-mentioned major negative news has caused a bloody storm in the cryptocurrency market. Bitcoin once fell by more than $10,000, and the 24-hour drop was close to 15%. Ethereum fell more than 10% during the session, Ripple fell more than 17%, Shiba Inu fell nearly 40% during the session, and Dogecoin fell nearly 17%. According to data from Bitcoin Home, in the past 24 hours, 302,500 people in the cryptocurrency market had their positions liquidated, with the amount of liquidation exceeding 23.8 billion yuan.
Musk's "rebellion"
Musk said on Twitter that the company will not sell any Bitcoin and will resume using Bitcoin for transactions after confirming that Bitcoin mining has transitioned to more sustainable energy. As a result, cryptocurrencies collectively plunged and Bitcoin prices fell sharply.
Suspend the use of Bitcoin payments for environmental protection? No Bitcoin will be sold
"Tesla has suspended the use of Bitcoin to purchase cars. We are concerned that a large amount of fossil fuels are needed in Bitcoin mining and transactions, especially coal, whose emissions are the worst of all fuels. Cryptocurrency is a good idea on many levels, and we believe it has a bright future, but this cannot come at the cost of burdening the environment." Musk said on Twitter on May 12. According to data from Cambridge University and the International Energy Agency, at the current rate, the amount of energy used each year to mine Bitcoin is about the same as the Netherlands' energy consumption for the entire year of 2019.
Musk also said on Twitter that the company will not sell any Bitcoin and will resume using Bitcoin for transactions after confirming that Bitcoin mining has transitioned to more sustainable energy. He revealed that Tesla is also paying attention to other cryptocurrencies, which use less than 1% of Bitcoin's energy.
Affected by this, cryptocurrencies collectively plunged, and the price of Bitcoin fell sharply. Information provided by the market information agency "Bitcoin Counter" website showed that the spot price of Bitcoin fell to $46,294.72 on the 12th, down 20.23% from the high point in 24 hours.
On May 11, Musk also launched a vote on Twitter: Do you want Tesla to accept Dogecoin payments? Among the nearly 4 million netizens who participated in the vote, 78.2% supported it and 21.8% opposed it.
In the first quarter of 2021, Tesla sold $272 million worth of Bitcoin after purchasing $1.5 billion worth of Bitcoin. According to a financial document filed by Tesla on April 26, the profit from its Bitcoin sales allowed the company to earn $101 million in profits.
The U.S. Securities and Exchange Commission has accused Musk of securities fraud
When Tesla announced in February that it had purchased $1.5 billion worth of Bitcoin, Dan Ives, president of Wedbush Securities, said, "This will have a chain reaction on other companies." Ives expects other companies to soon begin researching the Bitcoin field and will follow Musk's footsteps.
According to CNBC, after Tesla, mainstream investors and some corporate buyers including Square, Metromile and Nexon have flocked to the Bitcoin market, believing that this digital currency is a potential tool to hedge inflation. Big Wall Street banks such as Goldman Sachs and Morgan Stanley also plan to provide investment tools for Bitcoin and other digital assets for high-net-worth individuals.
But some investors, such as SoftBank founder Masayoshi Son, remain cautious about the cryptocurrency craze. Son said at a recent press conference, "As to whether Bitcoin is a good thing or a bad thing, to be honest, I don't know. There are a lot of discussions about what its real value is and whether it is in a bubble."
Media reports say Musk has been an open fan of Bitcoin and Dogecoin. His comments have also greatly affected the price of virtual currencies. Last weekend, when Musk co-hosted the old American entertainment variety show "Saturday Night Live", he called Dogecoin a "scam", and then Dogecoin plummeted by more than 40%.
Musk is believed to have deliberately raised the price of cryptocurrencies such as Bitcoin by actively encouraging more people to buy cryptocurrencies on social media. Musk has been accused of influencing the market with tweets in the past, the most famous of which was the U.S. Securities and Exchange Commission accusing Musk of fraud in 2018 because he tweeted that he would take the company private at $420 per share.
"Crazy" cryptocurrency circle
Under the promotion of "sales madman" Musk, Dogecoin soared 260 times in half a year. However, when you think Dogecoin has already gone against the sky, a more inhumane copycat coin appears. Shiba Inu Coin (SHIB) has increased by tens of thousands of times in 30 days, 100,000 times in 3 months, and more than 1 million times since its appearance.
Come quickly
Shiba Inu Coin increased 100,000 times in 3 months, and CSPR increased 2213 times in one night
Previously, under the promotion of "sales madman" Musk, Dogecoin soared 260 times in half a year. However, when you think Dogecoin has already gone against the sky, a more inhumane copycat coin appears. Shiba Inu Coin (SHIB) has increased by tens of thousands of times in 30 days, 100,000 times in 3 months, and more than 1 million times since its appearance.
In fact, Shiba Inu Coin, like Dogecoin, is a kind of altcoin derived from Bitcoin. The recent surge in Shiba Inu Coin is also due to Musk's praise. On May 7, a foreign netizen tweeted: "If investors want to trade Shiba Inu Coin in the short term, they can. But don't consider doing the same with Shiba dogs." As a result, Tesla CEO Musk replied to his tweet: "I'm looking for a Shiba Inu dog."
On May 8, Shiba Inu Coin’s highest increase was 251%, with a single-day trading volume of 40.3 billion yuan, and it even became a hot search on Weibo. On May 10, Shiba Inu Coin was launched on Binance Exchange. In just 10 minutes, SHIB soared by more than 100%. The huge trading volume directly caused Binance Exchange to crash and temporarily suspended withdrawals.
There are also rumors that a big shot accidentally invested 1,000 yuan to buy SHIB, and bought a total of 720 billion coins, but now its value has reached 80 million yuan, 1,000 yuan has become 80 million. The madness of the cryptocurrency market can't help but make people sigh: "One day in the cryptocurrency circle is ten years in the human world."
In addition to Shiba Inu Coin, another altcoin in the cryptocurrency circle also became famous overnight. At 8 pm on May 11, CSPR surged 2213 times from $0.03 to a maximum of $66.4.
Go fast
Tesla suspends Bitcoin transactions, 300,000 people in the cryptocurrency market are liquidated
The madness of the cryptocurrency circle is unimaginable. With the mentality of "getting rich overnight", many people can't help but rush in to speculate. However, huge risks are coming to them.
After Musk announced that Tesla would stop accepting Bitcoin as a payment method, the cryptocurrency market was in turmoil. Bitcoin once fell by more than $10,000, hitting a low of $45,500, with a 24-hour drop of nearly 15.29%. Ethereum fell more than 10% during the session, Ripple fell more than 17%, Shiba Inu fell nearly 40% during the session, and Dogecoin fell nearly 17%.
Data from Bitcoin Home shows that in the past 24 hours, 302,500 people had their positions liquidated in the cryptocurrency market, with the amount of liquidation exceeding 23.8 billion yuan.
It is worth noting that in addition to the impact of Tesla's news, in the past week, compared with other crypto assets, Bitcoin has been weak and its market share has continued to decline. The virtual currency market software Feixiaohao App shows that the current total value of Bitcoin is about US$950 billion, and its share of the global cryptocurrency market is 44%, while last week, this figure was 47%.
Zhang Ming, a researcher at Binance China Blockchain Research Institute, analyzed that this is because a large amount of speculative funds have poured in. These hot money have little interest in Bitcoin, which has risen too much, and have turned to crazy speculation on "air coins" with low unit prices and small increases. Many "animal coins" are representatives of this. Another important event yesterday was that Ethereum founder Vitalik sold and donated many "animal coins", causing them to fall sharply. These irrationally rising air coins are extremely risky, and investors need to pay attention to the risks.
Industry insiders comment on the cryptocurrency circle
Viewpoint 1
Bitcoin mining is transitioning to sustainable fields
It is generally believed in the industry that the direct cause of this round of Bitcoin decline is Tesla's suspension of Bitcoin payments.
According to Securities Daily, Li William, chief researcher of OKEx Research Institute, told reporters that in terms of the impact, this incident has caused a short-term impact on Bitcoin. However, Musk still said that encrypted digital currency has a bright future and will not sell Bitcoin. As long as Bitcoin mining transitions to other sustainable energy sources as soon as possible, Tesla will resume Bitcoin payments.
Zhang Ming, a researcher at Binance China Blockchain Research Institute, said: "Tesla's suspension of Bitcoin payments has severely hit investor confidence. At the same time, the high leverage ratio in the previous bull market boosted Bitcoin's rapid rise, which also led to the sharp drop in Bitcoin this time."
"Whether Tesla accepts Bitcoin as a payment method has more formal significance than substantive significance." Zhang Ming believes that as Bitcoin mining shifts to clean energy, Tesla will continue to use Bitcoin as a payment method in the future. Tesla itself is also involved in the field of clean energy, which leaves room for imagination for its future shift.
William Li believes that Bitcoin mining is also transitioning to sustainable areas. From the perspective of the Bitcoin mining industry itself, the two main energy structures are hydropower and thermal power. The choice of which energy to use for mining depends on the cost of electricity prices, which is a market-oriented issue. In the medium and long term, as countries develop green new energy and tighten fossil energy policies, the cost of fossil energy generation is gradually increasing, while the cost of clean energy generation is gradually decreasing. The Bitcoin mining industry will eventually transition to sustainable clean energy.
Viewpoint 2
This kind of speculation will increase the risk of the entire crypto asset market
Wang Feng, founder of Mars Finance and chairman of Linekong Interactive, said yesterday that recent animal currencies (specifically currencies with similar names that emerged after the popularity of Dogecoin) have brought risks to the cryptocurrency market. After Dogecoin attracted attention, Shiba Inu coins, cat coins, pig coins, and all the animal worlds came out, which I am very disgusted with. First, Musk played a big role in the rise of Dogecoin, and few people can become a person like Musk; second, I personally think that we should be careful with the coins that appeared later. Third, the emergence of animal currencies one after another will increase the risk of the entire crypto asset market if the speculation continues.
Jeremy Grantham, who has successfully predicted the past two market crashes, said he believes Dogecoin investors will eventually lose everything, but can't change their crazy behavior and attitude. Investing in bubble assets is not a matter of intelligence, but a psychological problem. "Nothing is more annoying than watching your neighbor get rich," which can be a powerful driver of irrational prosperity. "I have had such an experience and I sympathize. I know that nothing I say will change their attitude. I feel sorry for them because I believe they can't afford to lose everything."
Earlier, at the annual shareholders' meeting, Buffett, the 90-year-old chairman and CEO of Berkshire Hathaway, rejected questions about Bitcoin, saying he did not want to make everyone unhappy. The 97-year-old Munger was blunt, "I hate the success of Bitcoin. I don't like this virtual currency hijacking our existing monetary system. Bitcoin is like a financial product that came out of thin air. I am not happy with this. I think this is contrary to the development of our civilization."
