This collapse, catalyzed by Elon Musk’s tweets criticizing Bitcoin’s energy consumption, was exacerbated by several factors, including China, reiterating its anti-Bitcoin stance, a large short position on Bitfinex, and the necessity of a general correction in the overbought crypto space.
Crypto-related hashtags are trending across the world, including #crypto, #buythedip, and #altseason2021.
Bitcoin skeptics and critics felt vindicated today as BTC temporarily plunged under $30K. Peter Schiff, a long-term Bitcoin antagonist, declared that today’s event settles the debate, proving that Bitcoin is not a safe haven nor a hedge against inflation – it’s merely a speculative asset that follows other high-risk assets (as it tanked alongside stocks).
Today should finally settle the debate. #Bitcoin is not a safe-haven, #inflation hedge, or store of value asset similar to #gold. It’s a highly speculative digital token that trades with other high-risk assets. That’s why its tanking today with stocks and not rising with gold.
— Peter Schiff (@PeterSchiff) May 19, 2021
Zhu Su, the CEO of Three Arrows Capital, played a very interesting move, seemingly shorting heavily on FTX. Today, his account was the #1 by PNL on the platform.
Slightly over a week ago, Su called for price targets over double what we are at now – making one wonder whether his tweet was sincere and that his thesis had changed since, or whether it was an attempt at manipulation to secure a more favorable short position.
Traders Determined to Resume Cycle
Swing traders and permabulls alike are not convinced that this correction is enough to stop the music. Loomdart, a very popular cryptocurrency trader, announced his rebuy of BTC at 36500. CZ, the founder of Binance, stated in a tweet: ‘if you panic sell, you won’t be crypto rich,’ reaffirming his bullish sentiment.
An unexpected hero arose from the carnage: Elon Musk, the potential first cause of the crash, restated that Tesla has diamond hands, implying that they would not be selling their BTC holdings.
Tesla has 💎 🙌
— Elon Musk (@elonmusk) May 19, 2021
Michael Saylor, the founder of MicroStrategy, also confirmed that he was ramping up his Bitcoin buys and has not sold a satoshi, reconfirming his long-held bullish thesis. Justin Sun, the founder of TRON, also announced a whopping $150 million bitcoin buy.
As BTC bounces back from one of its worst crashes in history, proponents from both sides cheer on from the sidelines: although the market is bearish, sentiment from large players is overwhelmingly bullish. If history is any indicator, a dip of this magnitude could provide an opportunity to scale into a net long position.