ELON MUSK has cemented his iron-clad influence over the cryptocurrency market yet again this week, as he boosted the price of Shiba Inu coin with the click of a button. Experts have now raised questions about his influence and what it could mean for the future of the cryptocurrency landscape.
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BITCOIN has rebounded from its price woes and has continued to grow, despite Elon Musk cooling on the cryptocurrency.
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ELON MUSK has confirmed that he and his partner of three years, singer Grimes, have separated.
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A UN CHIEF has slammed billionaire rocket men – which may include Elon Musk, Jeff Bezos and Richard Branson – for continuing their race to space while “millions go hungry”.
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On Monday, Elon Musk will take the stand to defend Tesla’s $ 2.5bn acquisition of SolarCity in 2016 against a shareholder lawsuit alleging the deal was rife with conflicts of interest.
In the run-up to Tesla Inc.’s 2016 acquisition of a company called SolarCity, Elon Musk hailed the deal as a “no-brainer” – a purchase that would combine the leading maker of electric vehicles with a manufacturer of solar panels that can recharge EVs.
It did not exactly work out that way.
On Monday in the Delaware Court of Chancery, the Tesla CEO will testify about the $ 2.5bn deal in a shareholder lawsuit that alleges that Tesla’s acquisition was rife with conflicts of interest, overlooked SolarCity’s fundamental weaknesses and unsurprisingly failed to produce the profits Musk had promised.
Questioned under oath, Musk plans to defend the purchase as a justifiable acquisition.
At the time of the all-stock purchase, Musk was SolarCity’s largest stakeholder and its chairman. Seven shareholder lawsuits, consolidated into one, alleged that Tesla directors breached their fiduciary duties in bowing to Musk’s wishes and agreeing to buy the struggling company. In what the plaintiffs call a clear conflict of interest, SolarCity had been founded by Musk and two of his cousins, Lyndon and Peter Rive.
Last August, a judge approved a $ 60m settlement that resolved claims made against all the directors on Tesla’s board except Musk without any admission of fault. That left Musk, who refused to settle, as the sole remaining defendant. The trial that begins on Monday had been scheduled for March of last year but was postponed because of the COVID-19 pandemic.
Daniel Ives, an analyst at Wedbush Securities, called the acquisition a “clear black eye” for Musk and Tesla, in large part because SolarCity has failed to turn a profit.
“It basically was putting good money after bad,” Ives said. “For all the successes and all of the unimaginable heights Musk has achieved, this is one of the lowlights.”
Most investors, Ives said, place no value on the company’s solar business.
“I just think Musk and Tesla underestimated the challenges and the hurdles that the business brings,” he said.
That said, Ives said he thought Tesla’s energy business could still become “modestly successful”.
Tesla, which has disbanded its media relations department, did not answer a message Friday seeking comment about the lawsuit. In its 2020 annual report, the company argued that the lawsuit was without merit and that Tesla would vigorously defend itself.
“We are unable to estimate the possible loss or range of loss, if any, associated with these claims,” the company report said.
Tesla’s energy generation and storage business generated $ 1.9bn in revenue last year – 24 percent more than it did the previous year. Much of that revenue came from selling battery storage units. Tesla does not specify whether the business made a profit, and it also has debt and expenses.
The lawsuit filed by the plaintiffs contends that Musk drove the decision to acquire SolarCity despite his clear conflict of interest.
Musk has a history of fighting government agencies and lawsuits. He was forced to pay a $ 20m fine to the Securities and Exchange Commission for making statements on Twitter about having the money to take the company private when he did not. But he won a defamation lawsuit that was filed by a British diver involved in the rescue of a Thai football team that was trapped in a flooded cave. Musk had called the man “pedo guy” on Twitter.
Even if the trial ends with Musk having to pay personally for the whole SolarCity deal, $ 2.5bn will not much hurt the world’s third-wealthiest person. Forbes magazine has estimated that Musk is worth roughly $ 163bn.
Ives suggested that while any such payment would not seriously affect Musk’s wealth, it would damage his reputation for choosing acquisitions.
Musk is fighting the lawsuit after others have settled “because that’s what Musk does”, Ives said. “I think Elon believes this was the right deal and still does.”
Katharine Wooller, managing director UK and Ireland of Dacxi, a crypto wealth building platform, said cryptocurrency has already made a massive impact and that its future is “bright”.
Ms Wooller told Express.co.uk: “The future for crypto is bright; the speed of adoption the last 18 months has been nothing short of spectacular, and it has been widely accepted as an asset class by major investment banks, asset managers and hedge funds, with an estimated third of institutional investors exposed to cryptocurrencies.
“In payments, too, the major players are integrating crypto, including Paypal, Mastercard and visa.
“The majority of the world banks also are considering switching to central bank digital currencies; this includes the Bank of England which is considering what has come to be dubbed âBritcoinâ.
“This is a key strategic gain for the industry on a number of fronts. It is a great sign of the dominance of crypto technology, which will increasingly be seen as standard, and that the majority of the worldâs population will be using crypto, albeit sometimes without realising!”
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At 11am, Bitcoin was priced at $ 39,416. Musk tweeted at 12.07 and by 3.13pm it had dropped to $ 38,532 – a drop of over 1.5 percent.
1.63 percent drop in just over an hour. Ethereum fell 2.2 percent from $ 2,442 to $ 2,388 during the same period. And meme coin Dogecoin fell from a high of $ 0.314 at 8.15am to a low of $ 0.307 at 3.15pm.
The drop in prices for the cryptocurrencies comes after Elon Musk responded to reports Bitcoin is “greener” than critics say.
The entrepreneur and business magnate hit back at Jesse Powell, chief executive of the Kraken crypto exchange, who said bitcoin is “a lot greener than people give it credit for”.
Mr Powell told Bloomberg TV on Thursday that Musk has got “some more studying to do on this topic.”
Responding to the statement on Twitter, Musk said: “Based on what data?”
Bitcoin has seen prices tumble this afternoon, in response to comments by Elon Musk (Image: getty)
Bitcoin’s price fell this afternoon (Image: Getty)
The comment by the Tesla CEO has reignited his argument that Bitcoin is environmentally damaging due to the “insane” energy use required for the computing work that secures the network and creates new coins.
Last month, Mr Musk said his car company would stop accepting Bitcoin as a payment for its products due to concerns over how cryptocurrency mining contributes to climate change.
He said in a statement: “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
The announcement triggered a sharp fall in the price of Bitcoin.
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Elon Musk made the comment on Twitter (Image: Twitter)
On Sunday Mr Must said Tesla will resume Bitcoin transactions once it confirms there is reasonable clean energy usage by miners.
He said in a Tweet: “When there’s confirmation of reasonable (-50 percent) clean energy usage by miners with positive future trend, Tesla will resume allowing bitcoin transactions.”
Mr Musk’s comments on social media about cryptocurrency often send prices soaring or plummeting.
It comes as new data suggests 2.3 million adults are estimated to hold cryptocurrencies, up from 1.8 million last year, according to the City regulator.
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El Salvador has approved a bid to make Bitcoin legal tender (Image: GETTY)
El Salvador’s president Nayib Bukele backed the bid to make Bitcoin legal tender (Image: GETTY)
While ownership of cryptocurrencies has increased, understanding of them appears to have decreased, according to the findings from the Financial Conduct Authority (FCA).
It has warned that investing in cryptocurrencies is high risk and investors should be prepared to lose all their money.
People have around £300 invested on average.
The FCA cryptocurrencies can take many forms and some include Bitcoin and Ripple.
Tax rates compared (Image: Express)
Earlier this month El Salvador announced it will become the first country to accept Bitcoin as legal tender.
It plans to use the virtual currency alongside the US dollar.
However the World Bank has turned down a request from El Salvador for help setting this up.
A spokesperson explained: “We are committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes.
“While the government did approach us for assistance on Bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings.”
Cryptocurrency prices have fluctuated dramatically following Elon Musk tweets (Image: GETTY)
Under new legislation every business in El Salvador will be required to accept Bitcoin as legal tender, unless it is unable to do so for technological reasons.
The proposal, originally made by president Nayib Bukele, has been approved by congress.
However Bank of England governor Andrew Bailey warned of “tough love” as cryptocurrency regulations are strengthened.
He said: “What we cannot have is a world where innovation gets a free pass to ignore the public interest.
“The odds of such an approach not ending well are too high.”
Last month Mr Bailey branded cryptocurrencies “dangerous” and said investors should “buy them only if you’re prepared to lose all your money”.
Express.co.uk does not give financial advice. The journalists who worked on this article do not own Bitcoin.
Additional reporting by Emily Ferguson
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Billionaire Tesla boss Elon Musk has posted several updates on Twitter centred around the wild fluctuation on Bitcoin‘s price, with the latest being the logo of the world’s most popular cryptocurrency with a broken-hart emoji. He has been extremely vocal in his support of the cryptocurrency market but recently has appeared to lash out at Bitcoin since suspending plans from his company to accept it as payment for its electric cars, citing concerns over its excessive use of energy.
The comments from Mr Musk have infuriated Anonymous, who said in a newly-released video: “Millions of retail investors were really counting on their crypto gains to improve their lives.
“This is something that you will never understand because you were born into the stolen wealth of a South African apartheid emerald mine and have no clue what struggle is like for most of the working people in the world.
“Of course, they took the risk upon themselves when they invested, and everyone knows to be prepared for volatility in crypto, but your tweets this week show a clear disregard for the average working person.
“As hardworking people have their dreams liquidated over your public temper tantrums, you continue to mock them with memes from one of your million dollar mansions.”
In a scathing personal attack, Anonymous claims that despite Mr Musk presenting himself as someone who is concerned about the environment with Tesla’s move away from accepting Bitcoin as a form of payment, he isn’t actually practising what he preaches.
The video says: “For the past several years you have enjoyed one of the most favourable reputations of anyone in the billionaire class because you have tapped into the desire that many of us have to live in a world with electric cars and space exploration.
“But recently your carefully created public image is being exposed and people are beginning to see you as nothing more than another narcissistic rich dude who is desperate for attention.”
Anonymous then took things even further from a personal perspective and claims Mr Musk is suffering from a “superiority and saviour complex”, accusing the Tesla boss of hurting working-class people with his constant “trolling” of the cryptocurrency market.
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“You have even prematurely crowned yourself ‘Emperor of Mars,’ a place where you will be sending people to die.”
“There are plenty of other companies working on space exploration and electric vehicles you are just the only CEO who has gained a cult following through s***posting and trolling the world on social media.
“In fact, many people are not learning that the vast majority of Tesla’s income doesn’t come from selling cars, it comes from government subsidies – selling carbon tax credits for your innovation with clean energy.”
Anonymous concluded in a final warning: “As hardworking people have their dreams liquidated over your public temper tantrums, you continue to mock them with memes from one of your million dollar mansions.
“You may think you are the smartest person in the room, but now you have met your match.
“We are Anonymous! We are legion. Expect us.”
On Friday, Bitcoin’s price plummeted by more than seven percent after the bizarre tweet from Elon Musk, with rival cryptocurrencies also plunging as the volatile market continues to struggle.
Bitcoin’s price has suffered a dramatic fall over the past six weeks, slumping by a massive 42 percent since hitting a record high of $ 63,300 on April 16.
In February, the price of Bitcoin surged to an all-time high after he tweeted Tesla would begin accepting payments of the digital currency for sales of their electric cars.
But on May 17, Bitcoin’s price plunged to its lowest since February after the Tesla boss hinted the electric carmaker may sell its cryptocurrency holdings.
The previous weekend, Mr Musk suggested the firm was considering selling or may have already sold some of its holdings in the cryptocurrency.
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Bitcoin nosedived by several percent following the eccentric billionaire’s latest social media post, which suggested he was cutting off ties to the virtual coin. On Friday morning, Mr Musk posted a meme which implied he was going through a ‘break up’ with Bitcoin.
The meme depicted a couple breaking up over excessive quoting of Linkin Park lyrics.
Mr Musk shared the meme with the caption: “#Bitcoin” and an emoji depicting a broken heart.
Bitcoin tanked from this week’s price high of $ 39,000 to a little under $ 36,000 in a matter of hours afterwards.
Ethereum and Dogecoin also took a dive as a result of Mr Musk’s musings.
Ethereum dropped from $ 2,866 to $ 2,566 in a similar pattern to its main rival, Bitcoin, with the popular coins mimicking each other in price drops and surges.
Similarly, Dogecoin’s price followed suit with drops and surges but had more volatile reactions.
The recent price drop follows a warning from a prominent cryptocurrency trader who predicted the world’s most popular virtual coin could be plunging towards a “death cross”.
Crypto trading and analyst company, Rekt Capital, said the economic death knell event could occur by the middle of this month unless Bitcoin’s price increases soon.
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“The Death Cross occurs with some lag. So by the time it happens – a lot of downside will have already happened.”
Now looking at current data, they said: “BTC is potentially on the cusp of a new Death Cross soon.
“If BTC doesn’t increase in its price soon and the EMAs [exponential moving averages] continue at the same current pace…The Death Cross could happen sooner in mid-June 2021.”
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FIL, the native crypto asset of the Filecoin network, was among the best performing digital assets Friday as it maintained its gains against a very bearish cryptocurrency market.
The FIL/USD reached an intraday high of $ 102.109 at around 3:00 am UTC — up more than 37% on a 24-hour adjusted timeframe. The pair underwent a sharp correction later on profit-taking sentiment but sustained its 24-hour gains by staying upward of 17%.
In contrast, Filecoin’s top rivals Bitcoin (BTC) and Ether (ETH) were down more than 6% and 7%, respectively, as of 9:45 am UTC.
Almost all the top-cap digital assets posted losses after Elon Musk, CEO of Tesla, tweeted a cryptic breakup meme with a hashtag #Bitcoin and a broken heart emoji.
According to the firm’s securities filing released in February, Tesla had added $ 1.5 billion worth of BTC to its balance sheet. However, Musk’s mysterious tweet on Thursday night raised fears that Tesla was going to or has already unloaded its entire Bitcoin investment.
And you didn’t sell, right?
— Jay_OKEX_CEO (@JayHao8) June 4, 2021
Bitcoin dropped from around $ 39,500 to as low as $ 36,250 within a day. Meanwhile, the assets that remain positively correlated to the benchmark cryptocurrency also plunged in tandem. That included the second-largest cryptocurrency Ether, followed by its top-most rivals Binance Coin (BNB), Cardano (ADA) and even Musk’s favorite Dogecoin (DOGE).
On the whole, the cryptocurrency market capitalization lost more than $ 128 billion in the previous 24 hours.
No major event took place in Filecoin’s decentralized file storage ecosystem this week. The last major announcement from the project’s team came on May 27, wherein it revealed “HyperDrive Network Upgrade” that proposes to boost its storage onboarding rate by 10–25 times than the current rate.
Filecoin traders ignored the said update — the FIL/USD exchange rate plunged 4.36% on May 27 and 6.45% in the next session. Meanwhile, the pair traded choppily between May 20 and Wednesday in a tightening consolidation range, even as other tokens logged wild intraday price fluctuations.
Filecoin’s under-performance against rival tokens also pushed its Relative Strength Index (RSI), a technical indicator to measure an asset’s price momentum, just near oversold territory. Traders typically increase their exposure in the assets that appear undervalued per the RSI readings — below 30. FIL/USD’s RSI was 35.96 before its latest price jump.
So, it appears Filecoin attracted traders owing to its perceivable undervaluation compared to other top digital assets. That provided a short-term hedge to traders attempting to offset their risks against the Musk-led crypto market decline.
$ FIL (USDT) flexing relative strength to market pic.twitter.com/Wsueca6biU
— Cheds (@BigCheds) June 4, 2021
FIL also displayed a similar strength against Bitcoin. The FIL/BTC exchange rate jumped by nearly 40% after opening the Thursday session at 18,286 sats. The pair corrected lower by around 8.25% in the early London session Friday. Still, they maintained intraday profits, showing that traders were in no hurry to go back to Bitcoin.
Strong volume spikes on both FIL/USD and FIL/BTC charts also indicated a renewed interest in the trading instruments.
Author: Cointelegraph By Yashu Gola
This post originally appeared on Cointelegraph.com News
