The price of bitcoin fell on Friday morning after billionaire Tesla CEO Elon Musk posted a tweet suggesting he’s fallen out of love with the world’s No. 1 cryptocurrency, prompting criticism from the CEO of the world’s largest crypto exchange. Musk tweeted the hashtag #Bitcoin and a broken heart emoji followed by a meme about a couple breaking up.
Bitcoin’s price fell by more than 4 percent from $39,211 to $35,814 at around 8:15 a.m. ET Friday. Prices of other digital coins fell too, with No. 2 cryptocurrency ether dropping more than 5 percent to $2,644 and dogecoin — Musk’s favorite crypto — plunging almost 7 percent to around 36 cents.
What Musk is offering is “Not financial advice”, tweeted Changpeng Zhao, the CEO of Binance. Binance is the largest crypto exchange in the world by trading volume, according to CoinMarketCap.
Zhao, known as “CZ” in the crypto universe, encouraged his 2.7 million followers not to sell, tweeting “Don’t be manipulated. #HODL”.
Bitcoin hit an all-time record of more than $64,000 in April before plummeting to almost $30,000 in May. It’s now down more than 40 percent from its all-time high, but still up almost 30 percent so far in 2021.
Tesla is the second-largest holder of Bitcoin in the world. The company announced in a February filing with the Securities and Exchange Commission that it had bought $1.5 billion worth of bitcoin, saying it would start accepting bitcoin as payment. Musk was credited with helping raise the price of cryptocurrencies via Twitter messages.
Musk’s tweets have moved crypto markets several times before. On May 13, the entire crypto market cap went from $2.43 trillion to $2.06 trillion within hours after Musk did a U-turn and tweeted that Tesla would stop accepting bitcoin for payment of electric vehicles over environmental risks and the intense energy use needed to mine bitcoin.
The price of a dogecoin spiked more than 34 percent in May after Musk, a fan of the meme token, tweeted that he was “working with Doge devs to improve system transaction efficiency” and that the work was “potentially promising.”
Binance’s Zhao reprimanded Musk for joking at the expense of other people’s money. “Tweets that hurt other people’s finances are not funny, and irresponsible,” he tweeted.
A Twitter user responded, suggesting that Musk should be censored. “People with aspergers lack social interaction skills or a “filter” when not to speak inappropriate things. They can also be incredibly clever, but people in a position of high standing should NOT be communicating freely like this.”
Musk announced in May while hosting “Saturday Night Live” that he has Asperger’s syndrome. “Look, I know I sometimes say or post strange things, but that’s just how my brain works,” Musk said on the show. “To anyone who’s been offended, I just want to say, I reinvented electric cars, and I’m sending people to Mars in a rocket ship. Did you think I was also going to be a chill, normal dude?”
Not funny, Zhao tweeted, suggesting that with great power comes great responsibility and there’s no place for Musk’s “random ‘humor'”.
Some on Twitter acknowledged that Musk’s tweets can hurt as well as help. “Incredible to watch a billionaire openly mocking the middle class for losing money from his blatant market manipulation. Personally I’m happy for the opportunity to stack more sats, but it really is incredibly myopic.”
Zhao has called out Musk before for sending out mixed messages. On May 30, the Binance CEO tweeted, “When you use electricity to run cars, it’s environmentally friendly. When you use electricity to run the most efficient financial networks in the world, it’s an environmental concern.”
Binance is being investigated by the U.S. Justice Department and Internal Revenue Service over money laundering and tax concerns, Bloomberg TV reported in May. Germany’s financial regulator has threatened to fine the Cayman Islands-domiciled exchange for offering securities-tracking digital tokens without publishing an investor prospectus.
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?