Bitcoin’s shock crash is now drawing parallels to the Black Thursday sell-offs of March 2020, with the world’s biggest cryptocurrency falling by 35% in the space of a month.
The fallout from Tesla’s decision to stop accepting BTC as a payment method, and Elon Musk’s hints that the company may sell its investment altogether, shows no sign of abating.
It’s fair to say that the drama hasn’t been especially lucrative for Musk, either. The Bloomberg Billionaires Index shows that the CEO’s total net worth has fallen by $9 billion since the year began, the biggest loss among the top 15 entrants. This means he’s been overtaken as the world’s second-richest man by Bernard Arnault.
Much of this agony can be linked back to Tesla’s share price, which has fallen by 20% over the past month. Stocks with crypto exposure have all been faring badly in recent days, with Coinbase officially falling below its reference price of $250 for the first time on Monday.
Critics are now lining up against Musk for different reasons. The crypto-friendly hedge fund Ark Invest has described Tesla’s concerns about Bitcoin’s energy consumption as “misguided” — arguing that the impact of crypto mining could actually become “a net positive for the environment” because of how it makes full use of renewable energy resources.
Meanwhile, Fisker — a big rival in the electric vehicle space — has said it won’t be investing in Bitcoin at all over climate concerns, perhaps suggesting that Tesla shouldn’t have bothered at all.
What’s Next for Bitcoin?
The $50,000s now seem like a distant memory for Bitcoin, and at the time of writing, the world’s biggest cryptocurrency is struggling to cling on to $45,000.
According to Bloomberg, some analysts believe that prices will return to the 200-day moving average, which would drag BTC down further to $40,000. With bearish activity in the ascendancy, we could soon see a pattern of lower highs and lower lows.
Meanwhile, CNBC’s Carter Worth has suggested that past sell-offs indicate that BTC could slide 55% from recent all-time highs near $65,000, theoretically taking it to $29,000.
Of course, there’s no shortage of optimism either — with many traders looking to instill a “keep calm and carry on” attitude. One of them is PlanB, the inventor of the stock-to-flow model, who says Bitcoin’s momentum is still “up and onward.”
The publicly listed, pro-Bitcoin business intelligence firm MicroStrategy is also undaunted, with CEO Michael Saylor officially announcing that the company has bought the dip. It has snapped up an additional 229 BTC for $10 million, at an average price of $43,663. Overall, it’s now holding on to 92,079 BTC that was acquired for a total of $2.25 billion. That said, MicroStrategy’s paper profits have dwindled by more than $1 billion since prices fell.