The crypto market is facing a tough day amid continuing concerns about the climate impact of cryptocurrency and further comments by Elon Musk.
Mr Musk – who has publicly become more sceptical about bitcoin in recent days – initially suggested that Tesla could have sold its vast bitcoin holdings. He later denied it, which helped the price steady but not recover.
It follows public statements from the Tesla chief executive that he was concerned about the climate impact of the cryptocurrency. He has also said that he is working to make it cleaner, including discussions with engineers working on dogecoin.
The latest comments come amid a difficult time for the cryptocurrency market. Overall, it is down 8.23 per cent over the last day, according to tracking website CoinMarketCap, losing $2.1 trillion.
That hit every major cryptocurrency. Bitcoin was down 8.5 per cent, ethereum down 9.3 per cent, and dogecoin continued to have trouble, having lost 5.5 per cent over the last day.
Even Cardano – which promotes itself as a sustainable coin, and so has weathered some of the losses that have hit others – was down more than 9 per cent, though it has still gained almost 25 per cent over the last week.
Asset managers say they are steering clear of cryptocurrencies
“Our stance with clients is the 10-foot pole rule: stay away from it,” Jason Pride, chief investment officer of private wealth at Glenmede, told the FT. “I don’t think the Fed and other regulators are fans of the current market structure for cryptocurrencies.”
Even the more positive asset managers expressed reservations about whether bitcoin would be a safe investment.
“We refer to bitcoin as an aspirational store of value and it’s an adolescent in terms of its development due to the extreme volatility,” said Tom Jessop, head of digital assets at Fidelity, the paper reported. “Some investors are willing to accept the volatility as they see bitcoin as a long-term venture opportunity.”
Andrew Griffin17 May 2021 15:06
Musk tweet stops but doesn’t reverse plunge
It’s been a while since Musk’s tweets this morning. While they helped to stop the plunge, they haven’t done anything to reverse it – the price is still down 9% over the last day, and the market is down 8.24%, according to CoinMarketCap.
Andrew Griffin17 May 2021 11:25
Musk suggests Tesla may have sold bitcoin holdings – then denies it
Musk has denied it. That helped steady the price – but didn’t bring back any of its losses over the last day. Bitcoin is down 8.4 per cent over the last day, and the market as a whole has dropped roughly the same amount, according to CoinMarketCap.
Andrew Griffin17 May 2021 08:58
Andrew Griffin17 May 2021 08:41