Over the last week, the price of Bitcoin (BTC) has been pushed up and down, with it making small moves of fluctuation every now and then. It seems to have stabilized in the $8,500 – $8,600 range for the past week, as of this writing, with the price being driven by tweets and statements from Tesla’s Elon Musk.
In a press conference on Wednesday night, Elon Musk casually dropped a few tweets about the prospects of the company’s stock and the volatility of the cryptocurrency market, and the moves sent the market into a tailspin. Tesla’s stock fell more than 10 percent on Thursday, adding to its losses since the beginning of the month.
For the past few months, the crypto markets have been in an endless free fall. It seems like everyone is talking about Bitcoin, and with good reason: it has been more than doubling its value over the past year, and has since quadrupled. The latest price tumble, however, appears to be a lot more than just a mere correction.. Read more about why crypto market is down today 2021 and let us know what you think.
In February of 2021, Elon Musk tweeted that he found the prospect of holding Bitcoin ‘adventurous’ for an S&P 500 company, but BTC and EIH are overvalued: “Money is just data that allows us to avoid the inconvenience of barter—–That said, BTC & ETH do seem high lol—Cryptocurrency is promising, but please invest with caution!”.
Tesla CEO Elon Musk said in April of this year that the company now accepts Bitcoin (BTC) as payment for its vehicles, and Tesla made a large purchase of BTC/USD at an average price of approximately $36K in recent months as part of its treasury operations. As a result, BTC, as well as other cryptos such as ETH, have benefited from increased adoption by businesses and institutions. Following Tesla’s announcement, the market was optimistic that other tech-savvy companies like as Google and Apple will openly adopt BTC/ETH and other Cryptos as a digital currency.
However, when Tesla’s quarterly report card revealed massive profit booking for its BTC holding, BTC/USD and ETH/USD both fell from their lifetime highs in late May. Cryptos were also impacted by Musk’s “U” turn on crypto, when Tesla suspended Bitcoin acceptance due to rising energy and environmental concerns.
Tesla & Bitcoin:
Musk went on to tweet and fight for DOGE:
“Ideally, Doge speeds up block time 10X, increases block size 10X & drops fee 100X. Then it wins hands down. It is high time there was a carbon tax! To be clear, I strongly believe in crypto, but it can’t drive a massive increase in fossil fuel use, especially coal. Working with Doge devs to improve system transaction efficiency. Potentially promising”.
Cryptos, on the other hand, rebounded when Musk said, “To clarify the situation, Tesla has not sold any Bitcoin.”
BTC/USD also rebounded from about $30K to nearly $40K when Tesla CEO Elon Musk tweeted, using a mix of text and emoticons, that Tesla has “diamond hands,” suggesting that the company manufacturer would not sell its $1.5 billion in Bitcoin holdings:
ETH may be a superior technology than BTC right now:
Cryptos like BTC/USD and ETH/USD have been viewed as a volatile digital alternative to XAU/USD (Gold) in recent years, particularly when CME launched the BTC/USD future contract, paving the way for crypto trading. In addition, regulatory and institutional acceptability was growing. However, as a result of an increase in crypto frauds and simple manipulation by celebrity investors/traders for their own gain in the absence of any regulator-institutions or companies, corporations are increasingly wary of using it as an alternative asset. BTC/Cryptos are often moved unnaturally by a single crypto tweet from a famous trader like Musk.
Bitcoin (BTC tech) was a wonderful tech breakthrough for system transaction efficiency a decade ago, however it is now outdated, costly, and has catastrophic EV effects. With obsolete technology, BTC is the AOL or BlackBerry of the Crypto world.
Ethereum (ETH) is an open-source Blockchain platform with smart contract capabilities that is decentralized. Solidity is the name of the programming language. Ethereum is a decentralized public ledger for verifying and recording transactions as a Blockchain network. Users of the network may develop, publish, monetize, and utilize apps on the platform, and they can pay using Ether, the network’s cryptocurrency (rewards). Ethereum suggested that Blockchain technology be used not just to maintain a decentralized payment network, but also to store computer code that could be utilized to power tamper-proof decentralized financial contracts and apps.
Although both ETH and BTC are built on the Blockchain platform, ETH is much more powerful. ETH surpasses BTC when it comes to building distributed apps and smart contracts, despite BTC’s success as a peer-to-peer payment system. ETH is considerably faster than BTC, with a mining period of approximately 10-20 seconds compared to 10-15 minutes for BTC. Unlike BTC, ETH transactions often take seconds rather than minutes to complete. Other Cryptos, or tokens, may also be generated on the ETH network, utilizing the same protocol as ETH but dispersed over various public/private Blockchains. ETH was created as a network for utilizing its coin to create irreversible, programmable contracts and applications.
The decentralized applications on the Ethereum network are referred to as ‘Dapps’ by ETH specialists. ETH is a Blockchain-based open-source platform for developing and sharing commercial, financial, and entertainment applications. To utilize ‘Dapps,’ ETH users must pay a fee. The costs are referred to as ‘Gas’ since they fluctuate based on the amount of computing power needed. After BTC, ETH is the second most valuable cryptocurrency in terms of market capitalization.
Cryptocurrency trading is here to stay, as long as it is regulated properly and not outright banned:
Following China’s Crypto crackdown, other Crypto-savvy countries such as the United States, South Korea, and the United Kingdom acted on Cryptos to prevent money laundering, particularly following a series of hacking incidents involving a critical U.S. oil pipeline and the payment of large ransom money via Cryptos. Ransom money in Cryptos is now being demanded by corporate hackers. Cryptocurrencies, on the other hand, are here to stay as an alternative asset class with lower volatility, rather than a legal or illegal tender or currency. There will be no blanket ban on Cryptos since, all else being equal, such a restriction may have a spillover/ impact on other asset classes such as stocks owing to large margin calls.
After falling -18.30 percent in May-June’21, ETHUSD fell almost -13.36 percent in July (till the 12th). However, it increased by almost 185.67 percent from December to April 2021, and by 4655.36 percent from the COVID low of 81.52 in March 2020 to the lifetime high of 4352.11 in May 21.
Technically, whatever the story is, ETH/USD (now at 1988) has to stay above 1680 levels; else, it may correct further below 1200-710-450 levels. For any significant rise, ETH/USD must stay above the 2405 level in order to reach the 3000-4200 levels. Looking forward, coordinated worldwide regulatory action may result in the orderly movement of all cryptos in a predictable range for investor protection (by guaranteeing AML/CFT compliances).
After a report that Elon Musk tweeted that Bitcoin is likely to fail, the market is responding even though there are no regulations in place. One of the major reasons is that even if the SEC regulates, traders will most likely move to other emerging technologies like Ethereum, which has no SEC intervention.. Read more about why is bitcoin going down and let us know what you think.
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