- Tesla CEO Elon Musk sends Bitcoin price crashing by tweeting that the electric vehicle maker will no longer accept the cryptocurrency as payment
- Hard to imagine that Musk is only just coming to realize that Bitcoin is mainly powered by fossil fuels, timing of tweets could suggest some manipulation of price
Imagine if you had the power to move the price of an asset with just one tweet.
Two hundred and eighty characters, your thumbs and the tap of the button, have the power to make you hundreds of millions of dollars.
How would you wield this power?
And more importantly, how would you resist using it?
Resistance is futile it appears as Tesla CEO Elon Musk takes advantage of his significant clout to swing the price of Bitcoin both upwards and downwards.
In a tweet yesterday, Musk cited concerns about “rapidly increasing use of fossil fuels for Bitcoin mining and transactions” as the basis for suspending Tesla purchases with Bitcoin.
Yet for someone who literally taught himself rocket science before launching SpaceX, devouring every book he could find on the subject, can we really believe that Musk didn’t know that the bulk of Bitcoin mining is from fossil fuels?
Can we really believe that the CEO of SpaceX was so clueless as to not have known that the bulk of Bitcoin mining occurs in China, powered by one of the most pollutive fuels on the planet, coal?
It would be a naïve person to believe that Tesla’s US$1.5 billion purchase of Bitcoin in February had not considered the energy consumption required to support the cryptocurrency.
If nothing else, one of the long-standing criticisms of Bitcoin and cryptocurrencies in general is that they consume large amounts of electricity, most of it from fossil fuels.
Yet somehow Musk and Tesla, an electric vehicle company completely missed these facts, but still found time to setup a support page dedicated to Bitcoin on the Tesla website?
Last month, Twitter CEO Jack Dorsey retweeted a whitepaper published by Cathie Wood’s Ark Investment Management that argued Bitcoin might be good for the environment by incentivizing renewable energy, and Musk replied to Dorsey’s tweet with a simple “True.”
But imagine that by making just one tweet, one move, you can crash the price of Bitcoin, and use the opportunity to snap up as much of the stuff as you want – wouldn’t you do it?
And given that Tesla holds substantial amounts of Bitcoin, some of which would have been purchased at an average price above where Bitcoin has currently corrected to, would you intentionally tank your own company’s balance sheet?
Especially when Tesla made a staggering US$1 billion in profit on paper in its first quarter Bitcoin investment, more than it made actually selling electric vehicles?
Instead, wouldn’t there be a temptation to rinse and repeat?
Tweet once to pump, tweet twice to dump.
Sell on the pump, buy on the dump – free money for the tweeter.
And even after Musk’s tweet, Tesla’s website still had information about how to make payments via Bitcoin.
Corporate oversight or cryptocurrency control?