The prices of several cryptocurrencies, which were soaring high in April, have plunged more than 40 per cent in the weeks since Tesla chief Elon Musk said the company would no longer accept bitcoin as payment, and now investors are pleading with the billionaire to stop tweeting about the digital currency.
Earlier this month, Musk jokingly called Dogecoin a “hustle” during his appearance on the late-night comedy show SNL. That, along with a series of events including China’s crackdown on cryptocurrency transactions and mining, crashed the prices of several digital tokens further.
“Do not pay attention to Elon Musk’s comments about anything in crypto at least over the longer term,” William Quigley, Managing Director of Magnetic, a cryptocurrency investing firm, said in a recent interview on CNN Business.
Several investors point to Musk’s tweet as a tipping point in bitcoin’s biggest collapse of the year, which was peaking even as late as mid-April at close to $65,000.
“Tesla until very recently was going to accept bitcoin as a payment. That alone told me he didn’t really understand how to think about bitcoin,” Quigley said.
He explained that while bitcoin had a good “store value”, and was very good for large cross border payments, it is not a substitute for normal transaction methods.
“Please don’t pay attention to what Elon Musk says about crypto because he is simply not an expert,” Quigley said, adding that the Tesla chief’s tweets about Dogecoin were irresponsible.
“I think for him it was more of a joke, but a lot of people, unfortunately, follow what he says. Maybe when it comes to energy efficient cars look at what he does, but ignore anything he says about bitcoin and crypto in general,” he added.
Some investors even took to Twitter to express anger against Musk’s flip-flopping tweets on cryptocurrencies that have the power to move their prices so wildly.
On Saturday, when Musk was asked on Twitter about his thoughts on people who were angry at him for his stance on cryptocurrencies, he replied that “the true battle is between fiat & crypto. On balance, I support the latter.”
Following this tweet, some pundits urged a note of caution, requesting investors to do their own research on cryptocurrencies and come to their conclusions instead of “worshiping” Musk.
Portugal-based Heidi Chakos, who has invested in bitcoin since 2014 and accumulated over 44,000 followers on Twitter in the process, urged people to think for themselves before making decisions in the space.
“Learn to think for yourselves and put your hard earned money into projects you actually think are deserving instead of investing in projects because a globalist puppet says they like it,” Chakos tweeted.
“I feel bad for anyone who makes investment decisions based on the tweets of someone who is just trying to stay relevant and take advantage of his platform,” she told the Wall Street Journal.
Megan Kaspar, managing director with Magnetic, told CNN Business that retail investors who are trying to make a quick buck from cryptocurrencies may buy Dogecoin “just because Musk is pumping it”.
“I still don’t understand what Musk’s perspective on dogecoin is and I don’t think the world does either. Why does he think it’s valuable. Institutional investors are very thoughtful and are not buying dogecoin just because Musk is pumping it,” she added.