Judging by what is happening in the crypto market right now, Elon Musk is likely to regret his decision to buy BTC. Tesla's decision to suspend accepting BTC as payment may lead to disastrous consequences. Investors are now rather disappointed with Musk and hardly forgive him for such a game that he pulled off a couple of months ago, praising bitcoin and telling everyone that he himself invested more than a billion dollars in it. There is a risk that Tesla may completely sell off its bitcoins if it has not already done so. If it turns out to be true, the crypto market will be gripped by high volatility.
Notably, Musk did not earn much from BTC. The Bloomberg Billionaires Index shows that the Tesla CEO's fortune has fallen by$ 9 billion since the beginning of this year, the biggest loss among the top 15 market participants. The problem is not that Musk expresses different opinions about bitcoin. Over the past month, the price of Tesla shares has sunk by more than 20% and reached local lows. If these levels are broken, Tesla is likely to incur more serious losses. Given the fact that Tesla shares are falling while other stocks of tech companies are more or less stable, a sell-off in the main stock markets could deteriorate the company's prospects considerably.
With the slightest downward correction of the market, which is quite overheated by cheap money and zero interest rates, a major sell-off in the market is widely expected. Traders who rely on short positions on Tesla are sure to take advantage in case of a downward correction in the stock market.
A breakout of the important support level of 559, which saved the stock market from bears more than three times, will lead to an instant price decline to $488, which will deliver a hard blow to Elon Musk. If we talk about the upward potential of Tesla shares, then they are unlikely to break above $626 in the near future. Until the situation with bitcoin, which is still stored in the accounts of Tesla, is clarified, or BTC does not return to its previous highs, investors will hardly add the company's shares to their portfolios even at current lows. Many are betting on the breakout of this level and a further decline to $626.
Many experts are already criticizing Musk for various reasons. Hedge fund Ark Invest that always supports the crypto market calls Tesla's concerns about bitcoin's energy consumption "misguided". It agues that the impact of crypto mining can actually have a positive impact on the environment through the use of renewable energy.
Some analysts say that Elon Musk should have been less vocal about Tesla's investment in BTC and just bought BTC calmly without attracting too much attention. Yet, he acted as an avid supporter of blockchain and cryptocurrencies.
Nevertheless, there are also those who do not blame Elon for his decision, saying that he a business genius and his companies Tesla and SpaceX will bring great benefits to humanity in the future.
The material has been provided by InstaForex Company - www.instaforex.com