Everything You Need To Know About The $100 Billion Crypto Price Swing
Bitcoin is perceived by the masses to be a decentralised monetary system, which is true. In the early days, we were told that bitcoin was the future of all online transactions, seeing many normal folks become millionaires overnight. But did you know that the world of cryptocurrency isn’t as dandy as you’d imagine?
This is because there’s been a $100 billion crypto price swing which has left investors with their jaws on the floor. Today we’re talking about everything crypto and breaking down the recent price swing that has devastated the market. Will the cryptocurrency markets recover in good time? Stay tuned to find out.
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It’s been a crazy week in the world of cryptocurrency and Bitcoin. Prices have swung massively over the last few days, with Bitcoin dipping below $30,000 before bouncing back. Now, these sorts of fluctuations aren’t unheard of in the crypto world but it does have economists questioning the stability of such currencies. Extreme Bitcoin price swings have been toppled by dogecoin, the meme-based currency invented by none other than Elon Musk. Unsurprisingly, dogecoin has entered the market very aggressively, skyrocketing (no pun intended) Musk’s pet project into the cryptocurrency top ten based on value.
Cryptocurrency traders are anxiously watching on and waiting for a live discussion between Musk and Twitter chief executive Jack Dorsey. This important conversation will set the future terms of business in the crypto world and will surely affect the stock price of many different digital currencies around the world. The B Word event organisers promised, “nothing is off-limits”. The B Word which was announced last month is an online event focused on everything Bitcoin. It aims to "demystify and destigmatize mainstream narratives about bitcoin" with the hope of expanding Bitcoin awareness amongst companies and institutions.
Musk has spent a lot of time alienating the Bitcoin community with his bad attitude towards crypto. The main reason for this is that he invested $1.5 billion of Tesla’s own money into Bitcoin earlier this year. He initially had a lot of bad things to say on Twitter about the B-Word before agreeing to attend. Musk has also spent time attacking the so-called Bitcoin maxis, who spend their time arguing against all of their cryptocurrencies other than Bitcoin. Over the last few months, Musk has called on developers to suggest new dodge coin upgrade ideas, promising that his own meme coin will undoubtedly “beat Bitcoin hands down”.
Rather unsurprisingly the dogecoin prices have skyrocketed by thousands upon thousands of percent since January 2021. Global investment firms have been funnelling bucketloads of cash into memcoin after the fallout of trading restrictions being placed on virtual meme stock GameStop in January. Dogecoin tokens which were traded hundred of times lower for years before all of a sudden jumped up in value and were being traded at an all-time high of $0.73 with the backing of a Musk fuelled pump.
In 2021, the Bitcoin race rally, which saw Bitcoin rise exponentially in very little time to around $65,000 per Bitcoin took a heavy but expected crash backwards. The Bitcoin mega crash is suspected to be driven by Tesla’s bet that the corporate and institutional Bitcoin buying would take over that of the everyday man. This all failed to come to fruition and pushed the crypto market into a huge dip. The April bitcoin crash wiped over $1 trillion from the combined crypto market capitalisation.
Experts think that it was in part, caused by Musk’s shocking announcement via Twitter that Tesla was ending the Bitcoin payment support it had added to its website a few weeks prior. In a statement shortly after his tweet, Musk cited bitcoins massive energy demands. However, the energy-conscious billionaire did promise to restart Tesla’s support for Bitcoin if the network set out guidelines for increased use of renewable energy in the future. “There are a finite number of bitcoins and computers must complete complex equations to access (or "mine") them and enter them into circulation — as more bitcoins are mined, the more difficult and energy-intensive that process gets”. Musk said in an interview to Forbes.
Another massive blow for the crypto world was China’s recent decision to ban Bitcoin and crypto miners who use powerful computers to secure the blockchain networks in return for freshly minted tokens. This is a direct response to Musk's attitudes towards the fledgeling currency which has led to many crypto experts and supports denouncing Musk. Nevertheless, Musk had this to say when speaking to CNN business last Friday. "If the price of bitcoin goes down, I lose money," Musk said. "I might pump, but I don't dump. ... I definitely do not believe in getting the price high and selling, or anything like this. I would like to see bitcoin succeed”. He went on to praise cryptocurrency pioneers and early adopters but said that nobody could have predicted the energy needs that crypto would need in the future. "Tesla's mission is accelerating the advent of sustainable energy. We can't be the company that does that and also not do appropriate diligence on the energy usage of bitcoin….Now, it looks like bitcoin is shifting a lot more to renewables”.
Musk has confirmed that he is keeping Bitcoin on its books and is likely to start accepting Bitcoin and other crypto transactions again when 50% of the power used for data mining has been reduced, coming from green energy sources such as solar and wind energy. Musk has said things like this on Twitter many times before and has then backed out, which leaves us to suspect that he might be trying to use his power to manipulate the crypto market for his own gain.
Dorsey’s company Square has invested millions in Bitcoin, building an intuitive app for crypto developers. Over the weekend and as a direct response to Musk’s intentions, Dorsey spoke about the potential to use various forms of unused energy to power cryptocurrency mining operations. He referred to a company called Great American Mining, which captures methane flares on oil fields and converts them into electricity. This electricity is then used to power its Bitcoin mining systems. "Just imagine all the unused energy that is being wasted every single day, and being able to get energy and converting it into a secure, sound money system for the planet," Dorsey said.
In other crypto news, an Amazon Bitcoin job ad boosted the cryptocurrency surge. The price of some cryptocurrencies surged over the weekend when Amazon listed a job revealing that it's looking to hire an expert in the field. The job advertised for a “digital currency and blockchain lead” to look at “how Amazon’s customers pay”. Bitcoin initially rose from $29,000 to over $39,000 per coin on Monday, cementing the largest growth the currency has seen in months. Etherium and Musk’s Dogecoin also saw gains.
A tax loophole is helping Bitcoin holders save tons of cash by avoiding federal taxes. This is because the IRS classifies digital currencies as property, and the rules regarding losses are much different than that of stocks and mutual funds. According to Onramp Invest CEO Tyrone Ross, wash sales rules don’t apply with crypto. Whereas you’d have to wait 30 days to buy your stocks back after selling, with Bitcoin you can buy it back immediately. This loophole paves the way for tax-loss harvesting which is huge news for crypto holders in the U.S. “One thing savvy investors do is sell at a loss and buy back Bitcoin at a lower price,” explained Shehan Chandrasekera, a CPA and head of tax strategy at crypto tax software company CoinTracker.io. “You want to look as poor as possible.”
Some financial industry heavy hitters have called for an end to cryptocurrency citing a lack of transparency. The market is volatile and can’t be tracked and recorded like the central monetary systems we currently have in place. This means that cryptocurrency poses a threat to the central banking system, which have no control over the millions of crypto transactions taking place each day. This is precisely why billionaires like Elon Musk are so heavily involved with crypto. It’s because it offers the super-rich a way to manipulate financial markets in a way that was never possible before. Cryptocurrency has very little regulation and even fewer systems in place to prevent market manipulation. This essentially means that whilst there are big gains to be made from investing, you should do so with caution.
As of the date that this video was published, the price of Bitcoin has risen 10% in the last 24 hours, with all other major cryptocurrencies following suit. Bitcoin is up by almost 20% in the last week, representing a move in the right direction. Let us know what you think about the crypto crash and whether you think the market is likely to recover and if so, how quickly?
That about wraps up our article for today. We know it was a bit intense but we really wanted to bring you all of the best and most up to date information so you can make informed deviousness in the future when deciding whether to invest in crypto or not. We’d love to hear your thoughts on Elon Musk and whether or not you think he’s playing a dirty game? Please don’t forget to like, subscribe and comment down below.