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I thought I was done talking about him for a while, and then, new tweets from Elon Musk once again made me change my mind.
To put it simply, everything I'm about to say in this article is based on personal assumptions. So you should take what I am about to write with caution. It is even more than usual an opinion. It is up to you to see if you agree with my theory or not.
Elon Musk starts his manipulation strategy with a tweet on May 13, 2021
On May 13, 2021, Elon Musk published a tweet in which he explained that Tesla was immediately ending support for Bitcoin as a means of payment for its electric cars:
The reason given is surprising in the Bitcoin world: Elon Musk has serious concerns about the environmental impact of Bitcoin.
The surprise comes from the fact that nothing has changed in the fundamentals of Bitcoin between January 2021 and May 2021. Everything that made Elon Musk endorse Bitcoin to include it in Tesla's strategy still holds true as of this writing.
Bitcoin hasn't changed, but Elon Musk apparently has.
At the end of April 2021, Tesla's quarterly results had already revealed a 10% sale of BTC held by his company. Elon Musk explained at the time that if it was simply to prove the liquidity of the Bitcoin market. Tesla was taking profits to show the relevance of its strategy.
Nothing to be alarmed about.
Elon Musk denigrates Bitcoin despite common sense, as Tesla reportedly still holds 43,200 BTC
Tesla still holds 43,200 BTC after all. As of May 1, 2021, the price of Bitcoin was still $58K. Tesla's Bitcoin was thus worth $2,505,600,000. Not bad when you consider that Tesla bought $1.5 billion worth of Bitcoin in January 2021 at a price of around $33K.
So Elon Musk had no logical reason to criticize Bitcoin.
If you own an asset, you would rather see its price rise. You are not going to use your influence to make its price fall sharply. That would be a sign that you are psychologically damaged. Unless you want to use your influence to manipulate the price of Bitcoin and buy it at a discount.
While continuing to criticize Bitcoin for its environmental impact, Elon Musk is setting the social media world on fire by saying that he continues to support Dogecoin, which he sees as the real people's cryptocurrency.
Dogecoin co-creator Jackson Palmer then gives his take on Elon Musk. As you can see, it is uncompromising:
For Jackson Palmer, Elon Musk is a “self-absorbed grifter”. Very harsh words that many people will end up sharing when we see the hypocrisy of Elon Musk in his attitude regarding Bitcoin.
Elon Musk leaves doubt about a possible sale of Bitcoin by Tesla
On May 16, 2021, Elon Musk responds to a tweet to cast doubt on whether Tesla has already sold or may sell what it has left in Bitcoin:
All of this uncertainty continues to drive the price of Bitcoin down. That's all it takes for some people to take advantage of this and bring up FUD information from China to further the fall.
On May 19, 2021, what was supposed to happen happened. The price of Bitcoin experienced a major crash from $43k to $30K in a matter of hours.
At $30K, the Bitcoin Tesla owned was worth only $1,296,000,000. His company was therefore in an unrealized loss. It was amazing to see someone like Elon Musk make his company lose money like that.
Once the bottom at $30K is hit, Elon Musk suddenly changes his attitude to favor a Bitcoin pump
At this point, a strong rebound is observed. The price of Bitcoin rebounds strongly to go back over $40K. Many large investors took advantage of the situation to accumulate more BTC. This is what everyone who has a long-term view of Bitcoin is doing.
The big uncertainty that remains at this point is whether Tesla was one of those who strengthened their position in Bitcoin.
Indeed, all of a sudden, Elon Musk's position on Bitcoin seems to be softening. He starts to respond in a way that reassures the market. Consider this first tweet in which he explains Tesla has diamond hands which means his company did not sell its Bitcoin in the midst of the storm:
Elon Musk then begins to be much more constructive.
He responds to a tweet from ARK Invest's research director by explaining that he agrees that the electricity used by Bitcoin could come from renewables at large-scale in the future:
This is a far cry from Elon Musk's concerns that seemed prohibitive on May 13, 2021.
Elon Musk becomes a Bitcoin supporter again on Twitter
Elon Musk then also talks about the Lightning Network as the solution that will change the game for the use of Bitcoin as a means of payment in everyday life by the greatest number :
Meanwhile, the price of Bitcoin rallied to test the $42K resistance several times. This is rejected, which brings us back to a test of $34K on May 21, 2021, as fear persists in the Bitcoin world.
Nevertheless, Elon Musk is now a Bitcoin supporter again. Amazing change of attitude in less than ten days.
The sequence we just experienced shows how Elon Musk might have been able to manipulate the price of Bitcoin to his advantage
If you wanted to know what large-scale Bitcoin price manipulation looks like, I think the sequence Elon Musk just delivered is a perfect example. Judge for yourself:
In red, Elon Musk's tweets promoted the dump movement. In green, the beginning of the pump following a potential purchase of Bitcoin by Tesla or even Elon Musk directly.
We will see what happens when Tesla releases its quarterly results in July 2021. That will give the first indication. If Tesla has increased the number of BTC it holds, then my theory would tend to be correct. If not, this would not have prevented Elon Musk from buying some personally without saying so.
He would have no obligation to do so as an individual.
Final Thoughts
In any case, this episode will leave its mark on Elon Musk's reputation. It will mark the slow but necessary decline of his influence in the Bitcoin world. This episode will be a reminder to everyone that no one person is more important than another in the Bitcoin world.
That's why Bitcoin is the money of the people supported by the people. Bitcoin does not need Elon Musk to succeed. It will rise once again from what amounts to a large-scale attempt to manipulate its price. Have no doubt about it.
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