As the cryptocurrency market’s weeks-long rut continues, Tesla’s billionaire CEO Elon Musk took to Twitter Sunday afternoon to refute claims that he engaged in a bitcoin pump-and-dump scheme earlier this year and said the electric-vehicle company would once again invest in the world’s largest cryptocurrency once its mining operations constitute a “reasonable” amount of clean energy usage.
“This is not true,” Musk said in response to a Cointelegraph article highlighting comments in which Magda Wierzycka, the CEO of financial services firm Sygnia, criticized Musk for bitcoin “price manipulation.”
According to Wierzycka, an anti-corruption activist who made the comments in a podcast released Wednesday, Musk announced Tesla’s bitcoin investment on Twitter, then “pumped up the bitcoin price” by tweeting about it on social media and then “sold at the peak.”
“Tesla only sold ~10% of holdings to confirm [bitcoin] could be liquidated easily without moving [the] market,” Musk added, referring to Tesla’s first-quarter bitcoin sale that resulted in proceeds of $272 million after several tweets touting the cryptocurrency.
In another big bitcoin pivot, Musk also said the company would “resume allowing bitcoin transactions” once there’s confirmation that miners are using approximately 50% clean energy with a “positive future trend.”
The Sunday declaration comes after Musk and fellow billionaire Michael Saylor, who heads up business analytics firm MicroStrategy, said on Twitter late last month they met with some of the nation’s largest bitcoin miners and would spearhead an effort to “promote energy usage transparency and accelerate sustainability initiatives worldwide.”
Specific goals for the group have yet to be announced, and participants collectively control less than 10% of the bitcoin network’s global computing power, but the effort nearly immediately drew criticism from the industry for attempting to centralize the cryptocurrency, which was intentionally designed to decentralize finance.
“The volatility we have seen [in bitcoin] is an unexpected function of what I would call market manipulation by Elon Musk, and if that happened to a listed company he would be investigated and severely sanctioned by the SEC,” Wierzycka said Wednesday, likely referring to the fact that the SEC only has regulatory authority over securities—and not currencies. The SEC defines market manipulation as the “iIntentional or willful conduct designed to deceive or defraud investors by controlling or artificially affecting the price of securities.”
Bitcoin soared in February after Tesla announced it invested $1.5 billion in the world’s largest cryptocurrency, but prices have plummeted since April, when Tesla disclosed it sold off part of its stake in a regulatory filing. Musk, who cheered on the crypto market during its massive rally earlier this year, helped intensify the crash last month by tweeting out that Tesla would no longer accept bitcoin because of its hefty environmental cost—a single development that wiped out more than $300 billion in crypto market value in just hours. Markets have failed to recover since then amid an intensifying regulatory crackdown in China, and the value of the world’s cryptocurrencies—at about $1.6 trillion Sunday—is just 60% of what it was a month ago. Bitcoin prices jumped nearly $1,500 after Musk’s tweet, climbing to just under $37,550.
What To Watch For
Dubbed the Bitcoin Mining Council, Saylor and Musk’s effort would theoretically require participants to publish their renewable energy usage, Musk said last month, but a timeline hasn’t yet been shared.
Despite bitcoin’s steep crash since last month, two of the cryptocurrency’s biggest corporate backers doubled-down on their bitcoin investments last week. MicroStrategy, which owns more bitcoin than any other corporation, announced last week it would raise $500 million in debt to buy more bitcoin—on the same day it warned it would face a second-quarter loss of at least $285 million as a result of its bitcoin holdings plummeting in value.