- The crypto market cap falls below $2 trillion for the first time since April.
- Bitcoin price falls to a three-month low of $42,000.
The crypto market has not recovered fully after Elon Musk’s tweet caused an unexpected market bloodbath that affected almost all leading assets. Over the past 24-hours, Bitcoin fell by $7,000 to trade at a three-month low of $42,000.
The dramatic fall of the Bitcoin price sent the total crypto market cap below $2 trillion for the first time since April. The drop has left many investors’ positions liquidated, with data from Bybt showing that more than $2.4 billion has been liquidated in the last 24 hours. The altcoins were not spared as Ethereum was massively hit to drop from an all-time high of above $4,300 to a current price of $3,500.
Elon Musk identified as the major culprit
Elon Musk has been at the heart of the latest drop after his unfriendly statement about Bitcoin caused the crypto market pullback. It began last week when the SpaceX founder announced that Tesla has stopped accepting Bitcoin payment for its electric vehicles. In addition, Elon Musk claimed that the crypto is not environmentally friendly.
There is a rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.
Bitcoin’s currency status under attack
Peter Schiff, the chief economist and global strategist at Europac questioned the ability of Bitcoin as a safe haven. According to him, buying the crypto should be classified as gambling, not investment. Schiff also questioned the currency status of Bitcoin since one tweet had the potential to crush the asset. The global acceptance of the crypto as money has been said to have a long way to go with its price volatility being a huge stumbling block.
If a single @elonmusk tweet can have so much influence over the price of #Bitcoin how can anyone seriously consider it to be money? How can Bitcoin be a safe-haven asset if a one-word tweet puts it at risk? It should be clear by now that buying Bitcoin is gambling, not investing.
— Peter Schiff (@PeterSchiff) May 17, 2021
Investors still expect Bitcoin to hit $100K
Despite the latest drop, investors have remained optimistic. PlanB conducted a poll on Twitter to gather the expectation of crypto investors in terms of where Bitcoin could possibly be trading by the end of 2021 following Elon Musk’s tweet. Participants were asked to vote whether the flagship crypto would end the year above $500,000, above $288,000, above $100,000, or under $100,000.
Interestingly, 44 percent of the 51,361 voters believe the price will trade above $100,000. On the other hand, 25.2 percent of the voters expect Bitcoin to trade below $100,000 while 22.5 percent expect it to trade above $288,000 by the end of the year. Only 8.3 percent expect Bitcoin to trade above $500,000 before the year ends.
— PlanB (@100trillionUSD) May 17, 2021