If there was any doubt about the influence Tesla CEO Elon Musk wields over cryptocurrencies, there was none left after his actions this week and the swing digital assets had following his tweets.
After his tweet sent Bitcoin prices tumbling on Tuesday, Musk tried to “rescue pump” prices back up by tweeting that Tesla is a “diamond hands” holder.
The “diamond hands” emoji is a reference to meme in which the holder of a specific asset – not just cryptocurrencies – makes it clear that they are holding them and not selling. In this case, Musk meant that his company Tesla was holding Bitcoin for the end goal, despite the potential risk.
Tesla bought $1.5 billion in bitcoin earlier this year to hold on its balance sheet. News of the buy sent the price of Bitcoin soaring.
“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,” News18 reported. It’s “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’)”.
Last week, the Tesla CEO announced that the firm would reverse plans to accept Bitcoin as payment for its electric vehicles. He cited Bitcoin’s high environmental cost as a reason for the move.
The news sent bitcoin investors into an anxiety spiral and pushed the price down. Musk later clarified that “Tesla has not sold any Bitcoin”.
Cryptocurrencies had a rollercoaster week with the two main digital currencies, Bitcoin and Ether, falling as much as 30 percent and 45 percent respectively, before partially recovering.
The slump in prices was triggered by China’s move on Tuesday to ban financial and payment institutions from providing cryptocurrency services and Musk’s indication that Tesla would not accept Bitcoin as a form of payment.
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?
Musk moved to affirm his support for Bitcoin, and the cryptocurrency market at large, after the crash and helped the market pare some of the losses.
He previously pumped the Dogecoin price by more than 34 percent when he tweeted that he was “working with Doge devs to improve system transaction efficiency” and that the work was “potentially promising.”
Now the third-richest man in the world, Musk has been accused of being a market manipulator.
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