Fun, fun, fun. It never stops in crypto.
If you are a newbie, you probably had a mini-panic attack yesterday. For the more veteran folks it was an amazing day to find some fiat to throw at the crypto dips.
It is all about perspective.
Are there any guarantees that this dip will stop and we will see a rebound? Of course not. In crypto you could lose everything. You could also gain much. No one knows which happens when.
Having said that, let’s examine the events that drove yesterdays’ blood bath.
It was a confluence of three different events.
Event 1: The Elon Musk effect
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
Elon tweeted that they will no longer accept Bitcoin as a payment. His tweet, which looked like it was drafted by the legal heads, alludes to environmental reasons behind the decision.
I think that is pure BS.
I think he is just setting the ground for a grand reveal of his plans in the energy sector. Tesla already has a big operation in Australia converting Solar energy into transportable energy. Homeowners there can install Tesla batteries and sell the excess energy back to the company.
Another theory is that he was forced by ‘Big Daddy’ to put that tweet out there to shake the markets.
Someone else commented that this could all be a distraction from his abysmal performance on SNL last weekend.
Whatever may be the reason, we know when a Billionaire enters any space – they can and will manipulate it to their self-interest! Lesson learned!
Event 2: Stock market takes a nosedive
I am surprised how busy the market was going after Elon about the crypto crash without a single reference to what happened in the stock market.
Dow Jones was down by about 640 points in a single day on the news of increasing mortgage interest rates, inflation worries and the Colonial Pipeline hack.
We know from the past that crypto reacts to stock market moves.
This had sent a negative tone to the day and Elon’s tweet only accelerated the crypto decline.
Event 3: SEC warning about bitcoin volatility
I think this one did not get the coverage it deserves.
SEC put out a statement about the risks involved with Bitcoin when gaining exposure to the asset through mutual funds and futures markets.
The news outlets were quick to drive the rhetoric about ‘SEC being against bitcoin’. However, if you read the statement, it merely alludes to the risks that should be expected when investing in a speculative asset like Bitcoin.
Should I panic about these events?
In my opinion, crypto existed without Elon and it will do so with him, although with the growing pains of dealing with an unstable teenager on cocaine in an adult body!
Dow Jones crashed 600 points but it is up 1000s of points over the past few months, a correction was not only anticipated, it was needed. This, in my opinion, does not seem like a big deal.
Gary Gensler, the new SEC commissioner, is no stranger to crypto and particularly bitcoin. He is actually a proponent of blockchain and crypto space.
However, in his capacity he wants this space to be run as per regulations instead of being a breeding place for scammers.
I personally want SEC to go after all these meme/shit/food coin creators who are just milking the newbies and gullible folk.
No sane person can argue that crypto has become wild-wild-west and if we were to go mainstream – we need some lawful behavior. At least, that’s my personal view.
So to go back to the question, should I panic?
That depends on how exposed you are and what your risk appetite is. My risk appetite is scarily very high and I never recommend that to anyone.
For me, this dip was nothing to even pay attention to. That does not mean that it won’t continue to go down to shake out as many newbies and FUDders out of the market.
In the big picture of this super bull run, this may be even healthy.
So, bottomline is, I am not panic selling on this dip. I am not buying either because I am short on fiat to buy.
You have to decide what works for you.
Thank you for reading and sharing this article. We appreciate you.
Stay safe and healthy!
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