Cryptocurrency
Why Elon Musk Sold His Bitcoin Shares Out of Blue
A friend of mine lost substantial money overnight, and crypto investment concerned me
My Thought and Findings on the Recent Drop in Bitcoin
My story today is about cryptocurrencies, an exciting topic in my circles. We talk a lot about it during our gaming sessions. Many gaming friends participate in crypto investment.
As I see the crypto market as a game, it does not affect my psychology badly. Therefore, I invest a small amount, mainly in Bitcoin and Ethereum as the main currencies.
As my investment is insignificant compared to entrepreneurial friends, I only earned a few thousand dollars, which allowed me to purchase a good gaming machine and a few expensive games that became tangible assets for me.
However, some friends do it for a living, investing thousands of dollars. So losing big money hurts them, affecting their psychology.
This morning a gaming friend called and sounded very upset. I asked him what had happened. He is usually a cheerful character. We call him a cool dude in our circles.
He said he lost significant money from his crypto portfolio, which hurt him badly. He is a young entrepreneur similar age to mine. He got married at a young age and has two kids under five. He is much braver than me in terms of investing and relationships.
As a millennial, much of his portfolio is high volatile investments like stocks and crypto. He is a high-risk taker. Despite his brave character, I sensed sadness in his voice due to losing significant money in this economic climate.
I got curious about the crash last night in my time. When I asked him what might be the cause of the crash, he mentioned Elon Musk sold a significant amount of his Bitcoin share, creating panic in the market.
Then I checked my financial news feed. There were many articles about Elon Musk. The most recent one was from the Wall Street Journal titled “Tesla Sells 75% of Its Bitcoin Purchases.”
Then I checked my tech news feed and found a similar article from CNET titled “Tesla Has Sold 75% of Its Bitcoin, Despite Elon Musk’s Crypto Enthusiasm.”
The author of this article Daniel Van Boom whom I follow on Twitter, said:
“Elon Musk is something of an icon within crypto. That’s due in large part to his association with the dogecoin meme, but it’s also because Tesla is one of the most prominent institutional investors in bitcoin. Or at least, it was.”
Daniel informed that “Tesla’s $1.5 billion purchase of bitcoin, revealed in an SEC filing in February 2021, contributed to the market’s euphoria for cryptocurrency that caused bitcoin’s price to explode from around $20,000 in December 2020 to $60,000 in March 2021.”
A tweet in May gives us some clues about Mr. Musk’s thinking about cryptocurrencies. He sees them as valuable but raises environmental concerns regarding their energy use.
Here is the link to the tweet.
As quoted in a Reuters article in February 2022 titled “Elon Musk says bitcoin is slightly better than holding cash”, Musk said in a tweet. “Bitcoin is almost as bs as fiat money. The key word is ‘almost’.”
So my understanding is Elon Musk sees Bitcoin a little better than real money, but it is still “BS.” However, he seems to find investing in crypto is an adventurous pursuit, like my millennial friends.
So, the common question on social media, as Daniel captured in his article, “There’s debate over whether Tesla’s bitcoin sale was made out of necessity to maintain cash flow, or if it reflects faltering confidence in bitcoin and crypto in general.”
We don’t know the answer, and Tesla did not provide more information so far.
Final Thoughts
The Crypto world is volatile. Some lucky people win. And some unlucky ones lose. Despite focusing on cryptocurrencies for several years, I did not catch a pattern. So I have no idea what triggers wins and loses.
I did not lose much from my capital investment but lost a lot of profit within the last few years. I lost more from Bitcoin investment than Ethereum. The main reason was I bought Ethereum at a very low price by chance.
My gut feeling is the big players like Elon Musk cause such fluctuations. Elon is a loved/criticized public figure as he shares his thoughts and actions generously and transparently on social media, especially on Twitter.
But there might be many more big players like him who invest silently.
Despite its volatile nature, I still believe that crypto is a viable investment when diversified and used cautiously, as it is expected to be the currency of the future. However, as cryptocurrency has no tangible backing, a bubble burst like the Dotnet situation looks possible.
My investment is negligible. As I see it as a game, my losses do not concern me. However, it might badly affect those who depend on their living on it.
My parents wisely say, “only invest the money in crypto that you could afford to lose.” So their wisdom stays with me. Therefore, I only put my pocket money on crypto to enjoy the excitement like Elon Musk.
Thank you for reading my story. I wish you a prosperous life.
Disclaimer: Please note that this story does not provide financial advice. I only shared my thoughts and feelings for information.
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