Caymans Post

A world within. A state apart.
Thursday, Mar 28, 2024

Crypto investors to Elon Musk: Please stop tweeting!

Crypto investors to Elon Musk: Please stop tweeting!

The prices of bitcoin, dogecoin and other digital currencies have plunged more than 40% in recent weeks. While Elon Musk isn't the only reason for the crypto carnage, he certainly isn't helping.

Whether it's going on "Saturday Night Live" and joking that dogecoin is a "hustle" or having his epiphany that bitcoin mining may not be great for the environment, Musk's behavior has cryptocurrency bulls wishing he would stop tweeting and focus more on building cars instead.

Bitcoin (XBT) fans are tired of Musk exerting so much influence over the near-term price movements of seemingly all cryptocurrencies.

"People who followed Musk blindly have lost a lot of money. They may have gotten burned and never come back," said Alex Mashinsky, CEO and founder of Celsius, a crypto lending platform that offers digital tokens as rewards to customers — similar to a publicly traded company paying a dividend.

"The crypto community needs to be more responsible in how it explains these assets and the risk," Mashinsky added. "Pundits kept saying we'd never see a down market for bitcoin again because of institutional interest, Square and PayPal, etc. When you hear that, you have to worry."

Investors and analysts are particularly irked by that all cryptocurrencies have been rising and falling with bitcoin and dogecoin — in part due to Musk making flip-flopping remarks about them. Some crypto investors are also annoyed, to put it mildly, that a comment from Musk can move prices so wildly.

"Musk is very calculated," said Eloisa Marchesoni, an angel investor and cryptocurrency consultant. "People are angry."

Tesla did not respond to requests for comment about Musk's thoughts on bitcon, dogecoin and other cryptocurrencies. But Musk hasn't been silent on Twitter — and, for the time being, he seems bullish.

Musk still tweeting about crypto


In one tweet early Monday morning, Musk shared a parody of the famous movie poster of "Jaws."

A crumpled dollar was the substitute for the hapless swimmer about to get attacked, and the infamous shark was replaced with a giant dog. DOGE appeared in big red letters at the top, with the caption "You'll never use the dollar again."

Musk also responded to a Twitter follower on Saturday who asked him: "what do you think about the peeps who are angry at you because of crypto?" Musk said that "the true battle is between fiat & crypto. On balance, I support the latter."

Musk isn't the only reason for the sell-off. Also contributing to the slide are fears of stricter regulations in China (where many bitcoin mines operate) as well as the potential for more taxes on cryptos in the United States.

But Musk's constant chatter about crypto may be confusing some investors.

They may not realize there are different use cases for bitcoin, which many investors treat as sort of an inflation hedge (aka digital gold) as opposed to the second largest crypto ethereum, whose blockchain is used for many non-fungible token (NFT) transactions that are becoming increasingly popular in the art and collectbles world.

Laugh at the meme coins...but don't buy them


Good luck finding anyone with a convincing argument for why dogecoin and other joke currencies like shiba inu coin are needed for anything.

"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?" said Megan Kaspar, managing director with Magnetic, a cryptocurrency investing firm.

"Institutional investors are very thoughtful and are not buying dogecoin just because Musk is pumping it. But retail investors, who are not doing this for a living, may not be," she added.

Marchesoni urged long-term investors, the so-called HODLer faithful, to tune out Musk and focus on bitcoin, ethereum and other prominent coins like cardano and XRP.

"There is nothing to be worried about if you are a HODLer," Marchesoni said. "But if you are a small investor, you are going to get burned unless you stay away from the meme coins."

"The bubble will burst. It always happens with new assets. It will pop and we're not yet at the climax," she warned.

Mashinsky, the Celsius crypto lending platform founder, agreed that casual investors may soon grow tired of the volatility in cryptocurrencies — leaving only long-term bulls who love that digital money is not tied to the whims of government-backed central banks, unlike paper currencies.

So long to the casual crypto investors?


"We're getting a flushing out of all the crypto tourists," Mashinsky said. "Many of them are not here buying because they believe in financial freedom or long-term diversification. They're just trying to make a quick ride."

That's why some experts are also urging investors to look at so-called stablecoins such as tether, USD Coin and binance USD. These are cryptocurrencies pegged to the value of the dollar, euro and other forms of fiat money, as a way to hedge their bets.

"Stablecoins are asset-backed, so there is less volatility but they can help mitigate inflation pressure," said Ken Nakamura, CEO of GMO-Z.com Trust Company, which launched the world's first regulated stablecoin that is pegged to the Japanese yen.

But make no mistake: Bitcoin and other cryptos are still relatively young assets when compared to stocks, bonds and physical commodities and currencies.

Most cryptocurrencies are likely to be volatile investments for the foreseeable future, especially if Musk doesn't put his phone down.

"There is headline risk for cryptocurrencies and Musk is the poster child for that. What he says still matters...at least for now," said Ed Egilinsky, managing director and head of alternative investments at Direxion.

"Investors have to consider why they are buying. Hopefully, it's to diversify," Egilinsky said. "But there's not a long enough history to say that bitcoin or others are at true inflation hedge. This is still more like speculative momentum trading."

Newsletter

Related Articles

Caymans Post
0:00
0:00
Close
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Italian Court's Controversial Ruling on Sexual Harassment Ignites Uproar
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
BBC Personalities Rebuke Accusations Amidst Scandal Involving Teen Exploitation
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
Unilever Plummets in a $2.5 Billion Free Fall, to begin with: A Reckoning for Misuse of Corporate Power Against National Interest
Beyond the Blame Game: The Need for Nuanced Perspectives on America's Complex Reality
Twitter Targets Meta: A Tangle of Trade Secrets and Copycat Culture
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
×