Elon Musk causes panic rush for exit door by bitcoin newcomers

But old-timers have seen this movie before and are going nowhere.
The ‘twar’ between Musk and Bitcoiners is a setback, but it’s not the end, says BitFund’s Dean Joffe. Image: Bloomberg

Bitcoin is down 26% this week as Elon Musk went to war with the bitcoin crowd over his disapproval of the cryptocurrency’s energy consumption, and decided to reverse his earlier decision to allow purchases of Tesla cars in bitcoin.

Musk became an object of derision among bitcoin fans, as well as Dogecoin founder Jackson Palmer, who tweeted: “Reminder: Elon Musk is and always will be a self-absorbed grifter.”

Palmer founded Dogecoin in 2013 as more of a joke than a serious cryptocurrency, though Musk has been talking it up as a potential replacement to bitcoin for its supposed potential to transact faster and use less energy.

Read: Elon Musk ignites climate debate over bitcoin (May 14)

Musk clarified on Monday that his company Tesla had not sold any bitcoin that had been acquired earlier in the year, putting paid to speculation over the weekend that the company had dumped its recently acquired bitcoin.

Read: Musk fuels Bitcoin volatility by saying Tesla hasn’t sold stake (May 17)

“Elon’s tweets range from claims of negative externalities from energy consumption, to claims that 10x faster and larger blocks on Dogecoin are a viable alternative. Unfortunately, this has led to widespread confusion in markets, although for many Bitcoin HODLers (long-term holders), this is just another day in the office,” says blockchain intelligence group Glassnode, adding that newer market entrants are panic-selling, while “long term hodlers appear relatively unphased by the news”.

Read: Days of torrid Dogecoin gains erased as Musk ‘SNL’ episode airs (May 10)

While the current sell-off bears some resemblance to the previous macro peak of 2017, this time there are some unique differences that will challenge the conviction of both bulls and bears.

Long-term prospects vs short-term whims

Farzam Ehsani, CEO of crypto exchange VALR, says he’s not worried about the long-term prospects of bitcoin based on the short-term whims of Musk or any particular individual, no matter how much influence that individual may have.

“Bitcoin is the securest crypto asset in existence today and the fundamental value it offers of transferring value without any central intermediary in a censorship-resistant manner transcends the noise that we see on a day-to-day basis.

“We’ve seen such headwinds time and again,” says Ehsani.

“It’s nothing new. And of course bitcoin consumes energy – everything from our current banking system to gold mining to the use of washing machines by countless households across the world consumes energy – but few realise how bitcoin has the potential to convert the lowest-cost energy sources across the world into value for humanity. Bitcoin incentivises the adoption of low-cost renewable energy. Much of the media coverage on this topic is ill-informed.”

First-mover advantage

Adds Richard de Sousa, CEO of crypto exchange AltCoinTrader: “Whenever we see a bull run in full force, we see new, ignorant influencers trying to put their spin and claim their space in the digital universe.

“We’ve seen this happen many times. Bitcoin is established, and it is coming to take its significant part of the financial space.

“Resistance is futile and nothing can stop this,” he says.

“I think retail investors will start adopting more altcoins. Is it possible that bitcoin is going to lose dominance and find its true place in the crypto space? Of course.

“Bitcoin with its first-mover advantage cannot always be the only coin talked about. We are going into an era where bitcoin and cryptocurrencies are not synonymous.

“Bitcoin may lose its dominance, but it does have first-mover advantage, and it will be triumphant at the end of this.”

Bitcoin ‘resistant’

BitFund co-founder Dean Joffe says bitcoin has proven itself to be resistant, through the “forks” (when cryptocurrencies split into two or more coins with different rules), interference from governments and other potentially disturbing events.

“The ‘twar’ between Musk and Bitcoiners is a setback, as support from one of the most powerful individuals in the world is important for crypto [and Bitcoin’s] continued growth. However, it is not the end and Musk is one of many prominent players investing – at least we hope – in bitcoin,” says Joffe.

Musk tweeted that he is “working with Doge devs [developers] to improve system transaction efficiency. Potentially promising”, indicating that he does believe in crypto.

“Arguably, Musk supports crypto but the question of whether Tesla and Musk will continue to support Bitcoin remains to be seen,” adds Joffe.

“In our view, if Musk or Tesla sell their bitcoin or trade their bitcoin for an alternative crypto asset, this will cause a sharp decrease in price and be a major setback to the momentum bitcoin and other cryptos have had in recent months.

“This setback will not only be within the broader bitcoin community, but also within institutional arenas, where institutions are starting to take bitcoin seriously.

“We do believe that this drop in price is healthy, although accelerated by Musk, and in our view bitcoin should have another leg up, though this is not investment advice.”

Correction ‘consistent’ with past experience

Glassnode points out that the current correction in bitcoin is now over 28% below the $63 600 all-time high on April 13. “This is the deepest correction of the current bull market, however is consistent with five major pull-backs during the 2017 bull.”

However, the current bull has run for about 200 days, which is relatively short to the year-long bull run in 2017.

The number of entities that are currently in profit provides insight into the cross section of the market that is under water. This latest correction has led to over 23% of on-chain entities (unique, separate wallets) being at a loss, which is relatively low compared to previous periods.

Newer market entrants have panic sold and realised significant loses on their coins, says Glassnode.

“Given Bitcoin trades at much larger market valuation this may be a reflection of the larger capital inflows that are required to gain ground in market cap size. It may also provide an indication that this may be a larger time-frame pullback in a bull cycle, as weak hands capitulate, and stronger hands recommence their accumulation of cheaper coins,” says Glassnode.



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Musk and Tesla used to be the favourite “yes-but” argument of fearful bitcoin “investors”, who rolled out his name every time the inconvenient truth about their gambling was expressed.

“Yes, but Musk thinks it’s the future and has himself invested.”

“Yes, but you can buy a Tesla with bitcoin (although not in SA.)”

Now he’s their favourite villain, a single individual who caused a 25% crash in their “investment” in just a few Tweets. How ironic that their former darling is the one who brilliantly illustrated that there is absolutely nothing, no economic utility, behind this speculation, and again confirmed that bitcoin cannot and will never be a real currency.

Musk is the business worlds aspergers honey badger 🙂

rtanski – dying !!!! LOL

pfffft anyone who’s ever bought crypto knows it is massively volatile and this correction / crash ain’t the first or last. using this 30-odd-% drop as a soapbox to proclaim how right you were speaks of a complete lack of understanding. yes, crypto “investors” beware; but for every person who sounds off on what a scam this is, there’s a crypto holder who’s lapping them financially.

For every 100 “investors” in MTI or Krion, there were 5 who coined it.

have you read any of the white papers? comparing this to MTI or Krion is absurd and speaks of your general ignorance on this topic.

There is a very clear resemblance between a pyramid scheme – Krion – and the current crypto madness. It is this: because there is absolutely nothing backing crypto, it can only increase in price by finding more and more buyers; more and more suckers who believe the price is going to carry on increasing. This is exactly how a pyramid scheme must operate. It must find more and more participants.

Furthermore, there is nothing of real economic value behind a pyramid scheme, and the same applies to crypto. There is nothing of real, tangible value behind it.

And once the confidence collapses, because the ignorant who participate in the scheme suddenly realize that there is no real value, it inevitably collapses.

A third direct similarity is how angry the ignorant “investors” get when somebody points out it’s unsustainable, and how the ignorant then start flinging insults.

People who really know how to invest to make money long term don’t buy Bitcoin.

Bitcoin is the domain of techies who blow their load every time they hear the term “crypto” because it sounds so technologically progressive.

Unfortunately the “investment” is more volatile than Cape Town weather.

Currently slight North Wester with the possibility of light rain. But that may change….

Incitatus, If we didn’t know better the way you have explained things is that this happened over a long period of time. This all happened in only a few weeks.

Is it money?

– A medium of exchange? No; and probably can’t be. Transactions are expensive by design.
– A unit of account? No; value only ever represented as a USD price (inadvertently supporting the continued dominance of USD.)
– A store of value? Haha, this is where it gets funny.

Just like the dollar. Lots of new pieces of paper being printed right now to pay for socialist election promises.

Maybe Mr. Musk was the most perfect to take the crypto crowd down under.

No government supports crypto, so Mr. Musk was the perfect man for the job perhaps.

Sorry guys, seems that it was China more than Ellon Musk,
read the news on the CNN website.

No more easy money.

A plague upon CNN and the rest of the usurped media that operate against the truth and thereby against everyone that they take as fools. The facts can be gleaned without touching the skirts of these brain poisoners. Nonetheless you correct to observe that it is now China that inflicts the volatility. Their stealth has waited until the weakness inflicted by the tool known as Musk was easing. Their hatred of all and any issue that they cannot control with their yellow totalitarian jackboots is well documented in the remnants of fact-based and unadulterated publications.

One man, manipulates the value of Bitcoin three times to suit his own ends and the regulators remain silent?
Teslas last quarterly earnings showing the bitcoin gain as their only profit should be enough for the regulators to question Musks motives. Their silence is deafening!

I dont think there are any regulations that he can break since there isnt any controlling authority?

Manipulation of a share price in a public traded company by its CEO should be enough for regulators to query. In my opinion.

Is the supposed strength of Bitcoin not that it is unregulated?

Nothing untoward here.

A lamppost formation is normally followed by a waterfall formation. So the drop is a certainty not a surprise.

Great time to buy the dip. Might go down to $31000 then $26000 or perhaps even $21000.

Obviously make sure you have some dry ammo.

It also gives an opportunity to “some” that missed out and are now crying an entry point. Hahahaaaaaa.

Heish!! As for SARS. Hahahaaa go and look for another golden goose in the short term.

if BTC doesn’t bounce form $35k it might be a proper bear. hodl on to your hat.

What about the carrot formation and turd formation?

… I’m suspecting the puckered nought formation

Ah yes, people with vested interests always trying to put lipstick on a pig. “we’ve seen this all before”, “old timers are going nowhere”. Ciaran must have a substantial bitcoin interest with all the one sided bitcoin coverage on Moneyweb.
I just chuckle when I read statements like this “Bitcoin may lose its dominance, but it does have first-mover advantage, and it will be triumphant at the end of this.”
History is littered with “first-movers” who no longer exist.

The first movers in pyramid schemes profit too. 99% of the others, not so much.

Bitcoin, and all cryptocurrencies, are nothing more than a farce, a Ponzi scheme waiting to collapse. It has no value other than the belief that people place in it having value. Once that belief collapses so will the value of Bitcoin and people will lose a lot of money. How can something that can be created out of ‘thin air’ (Bitcoin mining) have any value, other than a perceived value by people falling prey to other people mining Bitcoin and continuing to sell their scam? Once people realize the scam that underlies all cryptocurrencies their values will drop to zero and there will be many depressed people left ‘holding the bag’. It is only a matter of time before Bitcoin drops to zero, like all other cryptocurrencies.

At least with a fiat currency you have the backing of the national government that issues the currency. Sure, with the USA printing trillions and trillions of dollars out of thin air, inflation is a risk. But at least those dollars are backed by the faith in the US Government and their tax base, whereas cryptocurrencies are backed by nothing other than a Ponzi scheme of people selling other people a dream based on a farce.

I have zero faith in cryptocurrencies and will be staying far away, not even risking one dollar of my investment capital. I hope that when the Ponzi scheme collapses, as it will, that the people left holding the bag can afford the losses they will suffer.

I predict that we will look back in 20 years’ time and realize just how big a scheme this was, starting off small and then gaining popularity, only for the creators of cryptocurrencies to laugh all the way to the bank as their Ponzi scheme collapses and they walk away with the riches, while those suckers who placed their funds into cryptocurrencies are left on the sidelines. People will wonder how they could have been so stupid and not seen this coming.

Mark My Words – Bitcoin is going to ZERO!!

LOL oh the “nothing” argument again. tell me, why does Visa or Mastercard have any value?
personally I’m a BTC bear; I see little value compared to ETH etc. but this whole rant of how crypto has no value is terribly uninformed.

I would have loved to short BTC but I don’t trust the financial system used to create a short position. Even if you are right you might not get paid, or you might get hacked, or your counterparty might default. Hardly a miracle for humanity, today’s digital currencies and crypto exchanges. What a shame it could be the trade of a lifetime if you could buy out of the money put options with a strike of $100 on BTC.

Of course you are right, but, alas, the messenger will always get shot. It happens with pyramid schemes too. Their “investors” get really, really uptight the minute somebody points out that their emperor has no clothes. Expect some flak from the hapless crypto “investors” too.

Sometimes the hyped masses are oblivious to the obvious.

Interestingly, not unlike the ANC/EFF rent-a-crowds

How do you know all this?

Just take my word for it, it is going to happen and I look forward to the day when people realize just how foolish they have been.

Musk is erring on the side of fraud. If he is taking positions prior to his comments, he should go to jail.

Because Bitcoin is regulated by financial services acts?


The Bitcoin community and Elon Musk deserve each other.

Brilliant as Musk is he is a hypocrite? He apparently claims he is leaving Bitcoin because of the energy it uses?????

How much more energy do his electric cars use?? Energy consumption which is likely to escalate exponentially in future.

Makes you want to just buy more gold.

So what about the energy consumption that is used to make tesla batteries?

Not to mention the slave child labour in the DRC.

“Palmer founded Dogecoin in 2013 as more of a joke than a serious cryptocurrency” – I’ll pour myself a nice chenin and watch it all burn down. My boring positions I’ve taken, bless them

One thing is for sure: Twitter will be the end of so many celebrities. Whether it is Donald Trump, Elon Musk or our own Helen Zille; for goodness sake stop your impulsive tweets! Think something through, consult with your advisors and then do a press release if you think it is still necessary. 9 out of 10 times it will be better just to keep quiet.

You don’t have to physically sell your Bitcoin – you short it, make a fortune on that and repeat the process.
I don’t trust Musk or any of these Bitcoin etc speculators.

Elon has the resources to manipulate and has played the long game in trolling. What he has effectively done is expose the fact that crypto is a sham.

Is there among all the high tech data and science of crypto a simple analysis of
Total bitcoin in existence.
Number held by the top ten, top hundred, top thousand holders.
Velocity (so basically how many average traded per month versus exist)
Average age of holding since creation
Possibly aged / lost : has never traded and is not held by the top hundred hodlers
Number lent out to shorts

When you want to trade something (classic car or shares or anything else where the future price depends what somebody else is prepared to pay), you would look at all or most of above in figuring a strategy

Although he is by no means a saint, I really enjoy how Elon Musk can shake around the crypto world like a cowboy with a cause.

If it does not have a direct responsible person ,an address ,a telephone number ,office or somebody else that is envious of having it .It is a scam .ponzy whatever you want to call it


Try call Old Mutual or Nedbank.

Same thing.


OLD MUTUAL or Nedbank… Wolves in Sheeps clothing

O first person saying something really truthful and proven!!

Ahhh….all the indoctrinated fiat slaves coming out to troll again:

‘Bitcoin is dead !’ [ no it isn’t, it doesn’t need Elon Muskrat to operate ]

Or how about that old favourite “It’s backed by nothing !!? “ [ like toilet paper fiat ever was ]

“It’s a ponzi scheme !’ [ no it isn’t – its a limited supply, operated on a transparent highway called the blockchain, with no centralized control, so it’s impossible to be a ‘ponzi scheme’ ]

While Bloomberg and those bankster controlled news outlets will trump how ‘finished’ it is…..

Meanwhile, back at the ranch – bitcoin just carries on growing to be utilized for what it was : an easy form of cross borderless transaction NOT controlled by greedy banks, corrupt governments, thuggish tax collectors, and where your funds are still much safer than lying in a bank as you are the ultimate custodian of your bitcoin funds [ ask all those Greeks/Venezuelan’s/Zims etc how their banks are ]

All the while, the USD has lost 99% of it’s value since 1913.

And the socialist controlled Biden government ramps up it’s Zimbabwe helicopter money printing campaign, which we all know how that will end.

Thanks, will still rather be holding bitcoin.

You DO realise that crypto does not have the transactional capability required to be used as a method of payment? It takes a bout 10 seconds for one transaction to be processed. There are of course trillions of transactions happening every day, so, no, it cannot replace fiat, unless some giant leap is achieved in processing.

How can an ‘investment’ be classed as safe when I lose it all if I lose my password?

As for limited supply – that has to be the daftest comment made – someone can just create a new coin at their behest – take Doge as an example.

Keep your fairy money – hope it works out for you.

@Vlad the Imploder

Who wrote:

“You DO realise that crypto does not have the transactional capability required to be used as a method of payment?”

I can move R1m in bitcoin anywhere in the world in 20min.

Try that using the traditional banking system.

And for those merchants who are accepting bitcoin already [ growing daily ], it takes approximately the same time and the BTC is sitting in their wallet.

However, using traditional credit card, the merchant can only receive his funds after a few days once the banks decide to release them.

You don’t need permission either on who you would like to spend your bitcoin on, and you don’t need to fill out any papers either [ooh,guavamunts around the world hate that !! ]

Amongst many other things.

“How can an ‘investment’ be classed as safe when I lose it all if I lose my password?”

Well, like anything else in this world, if you don’t posses responsibility, then perhaps crypto isn’t for you.

Neither is owning a car…..or a gun….or having children…..or anything of responsibility [ good luck with all your other passwords outside of the crypto world too ]

“As for limited supply – that has to be the daftest comment made – someone can just create a new coin at their behest – take Doge as an example.”

Comparing Doge to Bitcoin reveals your complete lack of understanding between the two.

Like saying stock market shares are worthless by comparing Steinhoff to Apple.

Guys, I have to be honest – the amount of sheer ignorance on some of these forums is astounding.

Almost disheartening – until I realize I’m glad to have been red pilled and moved on from there.

Then life becomes a lot more heartening once you realize what’s really going on.

Of course, for those that would prefer the blue pill and remain in their fiat induced coma – be our guest.

Each to their own.

It’s very easy to reset a forgotten password. How do you reset it on bitcoin ?

End of comments.



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