Elon Musk caused more calamity in bitcoin price action late Thursday and into Friday, leading at least one crypto hedge-fund manager to describe the Tesla Inc. CEO and prolific tweeter as “too influential on bitcoin prices.”
“Musk is definitely too influential on Bitcoin prices,” Kevin Kang, co-founder and principal at BKCoin Capital, told MarketWatch in emailed comments, while attending a bitcoin conference in Miami.
Kang’s remarks come after Musk on Thursday evening issued a cryptic tweet that many in the world of digital assets were interpreting as the billionaire’s breakup with bitcoin. The tweet included the bitcoin logo and a broken-heart emoji.
At last check, bitcoin prices BTCUSD, +1.17% were down over 4%, changing hands at $36,960.93 on CoinDesk, with the decline being blamed on Musk’s latest missive.
The price of dogecoin DOGEUSD, -0.51%, for which Musk has been one of its biggest champions, was down 2.5%, changing hands at 38.5 cents.
Musk’s social-media messages have had outsize influence on the prices of dogecoin and bitcoin and he’s at least partly blamed for the extant slump in bitcoin and the broader crypto complex. An article last month in The Wall Street Journal described him as bitcoin’s biggest influencer.
Last month, Musk tweeted that Tesla would no longer accept bitcoin as payment for its vehicles, citing the large carbon footprint of digitally mining for bitcoin. The tweet is still reverberating in crypto circles, reigniting a debate about the sustainability of bitcoin mining.
To be sure, bitcoin is influenced by geopolitical events, and tweets from other prominent figures in the industry. However, Musk has come to be a frequent and powerful voice in the crypto arena, with his significance perhaps amplified after he guest-hosted an episode of “Saturday Night Live” early last month, which was widely viewed as advancing crypto to the masses. That’s even if Musk at some point suggested that crypto like dogecoin, bitcoin and Ether ETHUSD, +2.11% on Ethereum’s blockchain might be a hustle, in one segment, to the chagrin of some crypto bulls.
Kang said that, at the end of the day, Musk’s power over crypto isn’t unlike the sway some traditional investors may have over more conventional markets.
“However, that’s no different to what we see in traditional assets when big name hedge-fund managers disclose their positions and those names move,” Kang said.
“I believe the more he tweets, the more immune the market will get in the future but for now, he’s definitely one of the big influencers of the Bitcoin market.”
To be sure, bitcoin is still up solidly so far in 2021, up 27%, and dogecoin is up nearly 8,000% in the year to date.
By comparison, traditional assets have seen more mundane gains. Gold futures GC00, +1.11% are down less than 0.1% thus far in the year; the Dow Jones Industrial Average DJIA, +0.52% is up over13%, the S&P 500 index SPX, +0.88% has gained almost 13% and the Nasdaq Composite Index COMP, +1.47% has climbed more than 7% in the year to date.