Bloomberg speculates that over the past 8 days, investors in the cryptocurrency sector must have been “fastening their seatbelts.” This refers to the tremendous volatility in cryptocurrency prices recently, primarily due to Elon Musk.
Musk caused Bitcoin’s price to drop nearly $10,000 in just a few hours last Wednesday after stating that Tesla would no longer accept payments in this cryptocurrency.
A few days earlier, Musk also appeared on “Saturday Night Live” and made jokes about Dogecoin, causing the price of this cryptocurrency to plummet dramatically. A few days later, Musk tweeted that he was working with Doge developers to improve transaction efficiency.
As of yesterday, Elon Musk further sank Bitcoin’s price below $45,000 after a tweet implying that Tesla had sold all of its Bitcoin.
Musk’s latest comment regarding Bitcoin began with a tweet from a user named @CryptoWhale stating: “Bitcoin players will get slapped next quarter when they find out Tesla has sold all remaining #Bitcoin. The hatred for @elonmusk will only grow…”
In response, the Tesla CEO replied: “Indeed”.
As an outspoken supporter of cryptocurrency with a massive following on social media, Musk wields the power to shake the market with his tweets.
Through numerous instances like this, it is evident that many people are skeptical that Musk is intentionally pumping cryptocurrencies for personal gain. This possibility is further reinforced by the fact that in late April, Tesla reported higher profits this quarter due to generating $101 million from selling 10% of its Bitcoin holdings.
Immediately, a Twitter user named Dave Portnoy tagged Elon Musk in a post discussing this matter. Dave used the term “pump” to describe Tesla’s actions on Twitter. He wrote: “As I understand it: Elon Musk buys Bitcoin, then he pumps it up, praises Bitcoin. The price of Bitcoin skyrockets. Then Elon Musk sells and pockets a huge amount of money”.
Since then, Elon Musk has been free to use his influence to manipulate the market. Currently, U.S. authorities have not made any comments on this issue.
However, previously, a millionaire named John McAfee was arrested for deliberately pumping and manipulating the cryptocurrency market.
Specifically, in early March, John McAfee – the creator of the McAfee antivirus software – was charged with securities fraud through his actions of “pumping” cryptocurrencies. Not only McAfee but also his accomplice and personal bodyguard, Jimmy Gale Watson, were accused of profiting from advising their Twitter followers to invest in cryptocurrencies like Reddcoin and Dogecoin, then selling their holdings at a high price.
The fraudulent activities of these two individuals were carried out from December 2017 to October 2018. McAfee used his verified Twitter account, which currently has about 1 million followers, to give advice such as “Coin of the Day” or “Coin of the Week.”
A lawyer explained McAfee’s case: “The defendant used Twitter to influence his hundreds of thousands of Twitter followers to engage in the purchase of various cryptocurrencies with misleading and false information to conceal his profit motive. McAfee, Watson, and other members of McAfee’s group are alleged to have earned over $13 million from investors.”