Another day, another Musk tweet, and another manipulation of the cryptocurrency market? Tesla CEO and SpaceX boss, Elon Musk has been awarded an unsaid Internet award, where the fluctuations of prices in the cryptocurrency market has been attributed to him. His reach, however, is sometimes more than cryptocurrency - tech and space enthusiasts hang to every word the entrepreneur posts on his Twitter, which sometimes are memes, and a lot of time, they’re simply sh*tposts. Musk’s tweets on a virtual platform managing to create fluctuation in prices of real-world things even has earned a new term: ‘The Musk Effect.’ As Bitcoin prices crashed late on Wednesday, Musk once more attempted to wreck havoc: all with a tweet.
Prices for the digital asset dropped 12% to about $38,000 as of 7:38 am in New York. It’s now down around 40% from its record of almost $65,000 set in April, according to Bloomberg. The world’s largest cryptocurrency has erased all the gains it clocked up following Tesla Inc.’s Feb. 8 announcement that it would use corporate cash to buy the asset and accept it as a form of payment for its vehicles. Now traders are bracing for more pain as the token breaches a key technical level. A statement from the People’s Bank of China on Tuesday reiterating that digital tokens can’t be used as a form of payment added to the selloff.
In the middle of this, Musk posted a tweet: Two emojis and two words.
Tesla has 💎 🙌— Elon Musk (@elonmusk) May 19, 2021
What is diamond hands? Elon Musk saying Tesla has “diamond hands” implies that the auto company would not be parting with its $1.5 billion stake in bitcoin. “Diamond hands" is a reference to “traders who believe in the eventual profitability of their stocks and securities and keep holding them while their value drops."
Bitcoin, ethereum, and other cryptocurrencies experienced a major crash on Wednesday: The 10 most valuable cryptocurrencies by market cap dropped by double digits, with one exception. It appears Tesla, according to Musk’s tweet, isn’t going to sell its cache of bitcoin.
“Diamond hands" is a meme pulled straight from the “WallStreetBets" Reddit forum, where retail investors rallied behind so-called “meme stocks" like GameStop and AMC. The jargon from WallStreetBets is a mix of traditional investing jargon with internet culture jargon, such as “hodl" (an intentional misspelling of “hold") and “diamond hands."
While Musk was busy ‘hodl’-ing on, other investors in crypto weren’t very happy. #BitcoinCrash was one of Twitter’s biggest trends.
say something good about bitcoin please i lost my house— jordan (@mygfreal) May 19, 2021
Well we are always late to the party! Too late ....#Bitcoin #BitcoinCrash #cryptocurrency #cryptocurrencies #cryptotrading #MEMES #Ethereum #cryptofall #cryptocrash pic.twitter.com/rN2tMY4WGe— saurabh.comic (@Saurabh31897383) May 19, 2021
— Meysammoradpour.crypto (@MeysaMoradpour) May 19, 2021
Last Thursday, Musk announced that Tesla is suspending purchases with Bitcoin which triggered a slide in the digital currency. In a post on Twitter Wednesday, Musk cited concerns about the “rapidly increasing use of fossil fuels for Bitcoin mining and transactions," while signalling that Tesla might accept other cryptocurrencies if they are much less energy-intensive. He also said the company won’t be selling any of the Bitcoin it holds.
Musk’s move comes after Tesla disclosed in February that it had purchased $1.5 billion in Bitcoin and planned to accept it as payment. That announcement added legitimacy to the cryptocurrency as an increasingly acceptable form of payment and investment, especially coming from a large member of the S&P 500 with a high-profile CEO who commands a big following among retail investors and the general public. Tesla’s website earlier also had a support page dedicated to Bitcoin, noted that Bitcoin was the only cryptocurrency that Tesla accepts in the continental U.S.
The tweet cause a slide in the value of the cryptocurrency, as much as 15% in Asian trading, sliding below $50,000, before paring some of the drop. It was down about 8% to $50,190.
Currently, at the time of writing this story 8:15 AM IST, Coindesk reports a -6.74% in the last 24 hours for Bitcoin, with the market cap now being $713.11 billion.