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Just yesterday, a one-word tweet from Musk was enough to plunge the crypto market deep into the red. “Indeed,” he replied to a popular crypto Twitter user @CryptoWhale, who suggested that “Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their Bitcoin holdings.”
While Musk later clarified that no, “Tesla has not sold any Bitcoin,” the damage was done.
As a result, not only were major cryptocurrencies’ prices suffering double-digit losses but companies that invested heavily or are otherwise exposed to saw their stocks plummet as well.
Meanwhile, stocks of the largest U.S. crypto exchange (-5% ), Jack Dorsey’s crypto-friendly digital payments firm Square (-4%), Bitcoin mining companies Riot Blockchain (-10%) and Marathon Digital Holdings (-8%), and others are similarly under the weather today.
Impact across the board
Such sudden dips can be especially noticeable for various crypto-focused funds like the Bitwise Crypto Industry Innovators ETF (BITQ). Launched just last week, this exchange-traded fund offers investors exposure to various crypto-related firms.
Apart from Coinbase, MicroStrategy, and Riot Blockchain, for example, Bitwise’s BITQ index also includes Mike Novogratz’s crypto bank Galaxy Digital Holdings (-7% today), Voyager Digital (-4%), and Northern Data (-13%)—among other companies.
In this light, it’s perhaps unsurprising that Bitcoin advocates are questioning Musk's outsize influence on the crypto market.