Elon Musk, the CEO of Tesla and a long-time supporter of cryptocurrencies, has issued a warning to investors hoping to profit from the recent surge in the prices of Bitcoin, Ethereum, Dogecoin, and other cryptocurrencies.
Elon Musk, the CEO of Tesla and a long-time supporter of cryptocurrencies, has issued a warning to investors hoping to profit from the recent surge in the prices of Bitcoin, Ethereum, Dogecoin, and other cryptocurrencies. Elon Musk said that while he assumes that cryptocurrency would be the world’s default currency in the future, people should not put their life savings into it. “First and foremost, I do not believe that people can invest their life savings in cryptocurrency. To be sure, I believe that is unwise,” Tesla’s CEO cautioned in a TMZ video.
Elon Musk’s tweets have sent Bitcoin and Dogecoin prices soaring thus far in 2021. Musk added the hashtag bitcoin (#bitcoin) to his Twitter bio earlier this year, sending Bitcoin prices to new peaks. Musk then tweeted ‘Doge’ in the following month, accompanied by another tweet that said, ‘Dogecoin is the people’s crypto’ and ‘No peaks, no lows, just Doge.’
“The argument is that dogecoin was conceived as a joke, basically to make fun of cryptocurrency,” Musk said when asked about Dogecoin. He also said that fate enjoys irony, and the most ironic outcome may be that the currency conceived as a joke becomes the real currency. Elon Musk tweeted the TMZ video, saying, “Cryptocurrency is promising, but please invest with caution.”
“If you want to speculate and maybe have some fun, there’s a fair chance that crypto is the future currency of the earth,” he said. When asked which one it will be, he replied, “I don’t know.” He answered, “It may be multiple.” Elon Musk went on to say that it should be considered speculation at this stage, and that the crypto speculation element should not be taken too seriously.
Elon Musk announced last month that Tesla Inc had sold 10% of its Bitcoin assets to demonstrate the cryptocurrency’s liquidity. Although he explained that he has not sold any of his personal bitcoin, he has kept his investment. Elon Musk said in a tweet last month that Tesla sold 10% of its Bitcoin assets to demonstrate the liquidity of Bitcoin as an alternative to cash on the balance sheet. Tesla invested $1.5 billion in bitcoin during the January-March quarter of this year, then trimmed its stake by 10%, contributing to a modest gain in its first-quarter financials.
Ethereum, the second-largest cryptocurrency, currently has a market capitalization of $403.84 billion, nearly half of Bitcoin’s $1 trillion market cap. According to CoinMarketCap reports, the price of Ethereum has increased by 16 times from $206 on May 7, 2020, to $3,465 on May 6, 2021, while the market cap has increased by 17 times from nearly $23 billion.
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