The CEO of Tesla Inc. (TSLA) and SpaceX, Elon Musk, has long been a supporter of Bitcoin (BTC) and meme currencies like Dogecoin and Shiba Inu Coin (SHIB).
The price changes of BTC, DOGE, and SHIB, in particular, have been referenced regularly on the Musk Twitter account, with both Tesla and SpaceX serving as pawns.
In the end, encouraging tweets, Tesla and SpaceX corporate announcements, and interviews have sparked concern and prompted inquiries about whether Elon Musk's comments resemble market manipulation.
More importantly, the most recent corporate news raises the possibility that there has been a change in attitude toward cryptocurrencies or perhaps that the crypto industry has been targeted.
Without prior notice, Tesla Inc. sells its bitcoin holdings
The revelation that Tesla was selling off 75% of its cryptocurrency holdings broke on Wednesday. Elon Musk mentioned worries about his company's overall liquidity as the reason for the sale, according to Reuters.
One year after investing $1.5 billion at or around the peak of the market, Tesla sold $936 million equivalent of BTC in Q2.
Elon Musk explained the issues with liquidity by saying, "It was crucial for us to optimize our financial position. This should not be interpreted as a judgment on bitcoin since we are very open to growing our holdings in the future. Simply put, we have some concerns about the company's overall liquidity.
Musk did affirm, however, that the business did not sell its Dogecoin (DOGE) holdings.
The news of Tesla's $1.5 billion bitcoin acquisition broke on February 8, 2021. Tesla flooded the market with a significant chunk of the 2021 investment, in contrast to other long-term BTC hodlers, often known as Bitcoin Whales, which contributed to the decline in BTC and the wider crypto market.
Although Musk emphasized that DOGE did not have the same outcome as SHIB, DOGE and SHIB currently face comparable possibilities. Both DOGE and SHIB have failed to show pricing consistency to support preferential treatment.
The crypto market responded to the news, demonstrating The Musk Effect.
From a day high of $24,276 the price of bitcoin dropped by 5.45 percent before finding support and finishing the day down 0.76 percent. In contrast, DOGE performed well, increasing by 1.59 percent to defy the day's general market trend.
The mentions of DOGE holdings might be seen as price manipulation. Speaking to Bloomberg TV in June 2022, Musk mentioned his support for DOGE. Musk responded to requests from DOGE investors to reaffirm his support for the meme currencies.
Regarding Tesla and SpaceX, Musk said in the interview that the BTC holdings were negligible in comparison to the cash assets.
The fact that Musk offered his support despite a $258 billion lawsuit being filed against him, SpaceX, and Tesla Inc. for saying that "Dogecoin is a legitimate investment when it has no value at all" is more noteworthy.
The Major Mistakes by Elon Musk Before Tesla and SpaceX
With sales revenues of more than $18 billion, Tesla Inc. has shown itself to be a successful automaker after a rocky start. Although SpaceX is more secure, Musk has a murky background. A succession of failures dulls the cv's appeal.
A failed job application at Netscape, being fired as CEO of Zip2, being fired from PayPal, and a spate of disastrous rocket launches are some well-known Musk events to forget.
The decision to sell off 75% of Tesla's BTC holdings serves as a caution to holders of DOGE and SHIB for investors hoping to profit from Musk's popularity.
Elon Musk said in June that the BTC holdings paled in comparison to cash assets. Should Musk sell his DOGE shares, Dogecoin may have a similar outcome. Musk may even stop accepting DOGE for Tesla and SpaceX purchases.
On January 29, 2021, Dogecoin had its defining moment when DOGE surged by 166 percent on reports that Elon Musk had bought DOGE. Musk made no mention of his acquisition of DOGE. Despite this, DOGE rose to an all-time high of 0.7398 on August 5, 2021 before plummeting to a year-to-date low of $0.0491 on June 18, 2022.
Despite Musk's repeated attempts to provide DOGE bounces, buyers who bought at roughly August 2021 prices will be disappointed. It is easy to see Musk's price increases while looking at the DOGE daily price chart. Since August 2021, they haven't managed to stop the decreasing trend.
In a June interview with Bloomberg TV, Elon Musk said something that should be remembered by cryptocurrency investors.
"I have never advocated for cryptocurrency investments"
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