What Does Elon Musk Think About Bitcoin Right Now?

The price of Bitcoin has been hit hard over the past week, as Elon Musk’s recent comments have spurred volatility.

| More on:
cryptocurrency, crypto, blockcahin

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

The cryptocurrency market was thrown into major turbulence on Wednesday, May 19. Volatility had picked up over the weekend of May 15-16. Elon Musk has proven to be one of the top market influencers in recent years. His endorsement of Bitcoin in February 2021 pushed the top digital currency to an all-time high. However, the cryptocurrency market was hit by huge turbulence over the past week. What was the catalyst? Moreover, can investors expect more volatility from Bitcoin in the weeks and months ahead?

What caused cryptos to tank last weekend?

Cryptos started to encounter turbulence by the middle of April after a blackout in a major crypto mining region in China. Meanwhile, investors were spooked by rumours of a coming crackdown on the young sector. Last month, I’d discussed whether or not the Bitcoin bull run was over.

The price of Bitcoin was trading just below the US$40,000 mark in early afternoon trading on May 20. The top digital currency has gone from a high above US$51,000 earlier this week to a low of US$35,000. What Elon Musk giveth, he also taketh away. Comments that he has made in public appearances and through social media have gravely impacted the crypto market in May.

Is Elon Musk moving away from Bitcoin?

Crypto enthusiasts had already grown somewhat bitter after Elon Musk’s participation in a Saturday Night Live sketch wherein he referred to Dogecoin as a “hustle.” On Sunday, May 16, Musk hinted that Tesla may have already shed its Bitcoin holdings. Moreover, the company said it would move away from allowing customers to buy its vehicles using the digital asset. It was critical of Bitcoin’s burning of fossil fuels to power its mining. This shocked the crypto market and led to a sharp drop in the sector’s top assets. Musk appeared to backpedal later in the week, which led to a rebound for Bitcoin and its peers.

The market’s vulnerability to Musk’s comments further illustrate its inherent volatility. It has enjoyed mainstream support, but investors need to take extreme care if they are looking for exposure to crypto.

How should investors respond?

Canada launched the first-ever Bitcoin-focused exchange-traded fund (ETF) in February. Purpose Bitcoin ETF (TSX:BTCC.B) has plunged 30% since its debut. Investors who jumped in when Tesla bet on Bitcoin have been punished if they have held into May. The same questions are sprouting up after this sharp drop. Should investors look to buy the dip in Bitcoin and its peers?

Veterans in the crypto market have looked to do damage control over the past week. They have pointed out that the banking and gold mining sectors use significantly more energy that crypto miners. Bulls have referenced Bitcoin’s impressive trajectory over the past decade to justify buying the dip in May.

The crypto market continues to fascinate and justifiably so. However, I’m not content to jump on Bitcoin’s price right now. Its price is worth monitoring as we move into the warmer months. Canadians who are intent on adding Bitcoin should consider the Purpose Bitcoin ETF. That way, they can take advantage of any future gains in a Tax-Free Savings Account (TFSA).

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. David Gardner owns shares of Tesla. Tom Gardner owns shares of Tesla. The Motley Fool owns shares of and recommends Tesla.

More on Investing

edit Sale sign, value, discount

3 Cheap TSX Stocks to Buy Before July

Canadian markets have bounced back, but investors can still snag undervalued TSX stocks like Finning International Inc. (TSX:FTT).

Read more »


Is Blackline (TSX:BLN) Stock Worth Your Attention in 2022?

Blackline Safety Corp. (TSX:BLN) stock has struggled in the year-over-year period, but there are some positives to glean from its…

Read more »

stock analysis

Why I’m Buying the Dip in Andlauer (TSX:AND) Stock

Andlauer Healthcare Group Inc. (TSX:AND) stock offered exposure to two promising spaces while offering solid value in late June.

Read more »

clock time
Tech Stocks

Now’s the Time to Load Up the TFSA With These 2 Top TSX Stocks

Here are two top TSX stocks that long-term growth investors may not want to give up on, especially at these…

Read more »

data analyze research
Energy Stocks

TSX Stock Picks With Huge Potential

If you want a TSX stock that's bound for even more strong growth, these three are top picks by analysts.

Read more »

growing plant shoots on stacked coins

Market Plunge: Double Your Cash With 3 Bargain Stocks

These TSX stocks have corrected over 50%, despite their strong fundamentals, and could easily double from here.

Read more »

oil and natural gas
Energy Stocks

Can Cenovus Stock Outperform in H2 2022?

Is now the time for investors in Cenovus (TSX:CVE)(NYSE:CVE) stock to buy more, or wait out this volatility right now?

Read more »

cup of cappuccino with a sad face

The Biggest Regret a TSX Investor Can Have

Hydro One (TSX:H) is a top bond proxy to own if you're a TSX investor who's worried about a pick-up…

Read more »