After dipping briefly below $40,000, Bitcoin seems fairly stable, but additional indicators have some analysts thinking that traders are continuing to head for the exits after Elon Musk threw water on BTC’s fire over the past week.
After suggesting that his car company, Tesla, would take customer payments in bitcoin, Musk reversed that offer last week, saying that the coin is too much of an energy hog in terms of mining.
Then there were rumors that Tesla was about to sell part of its massive stake in Bitcoin that some say made it pretty much of pure play on par with Microstrategy, a firm that famously led the rush to use BTC as a treasury asset.
Tesla has yet to divest itself of its Bitcoin, but those shadowy ideas themselves were enough to tank the coin’s rapid rally, where Bitcoin is now down 40% from highs over the past year.
Samuel Wan at NewsBTC, in describing an influx of Bitcoin into the Binance platform, is suggesting that there’s somewhat of a bank run on Bitcoin liquidity, saying recent events are “denting the narrative” that Bitcoin is an institutional investment choice.
Wan also covers some pretty harsh remarks by perennial bitcoin detractors like Peter Schiff, quoting a Schiff tweet:
“CEOs who followed@michael_saylor‘s asinine advice to plug their balance sheets into #Bitcoin to hedge against an expected annual #inflation rate of 2% are now down as much as 34% on their ‘hedge’ in one month. That’s 17 years of expected inflation losses. Time to pull the plug!”
Here’s the disconnect with this type of idea – yes, Bitcoin has come down right now, and represents decades of inflationary losses right now, but as easily as it slid, it can regain all of that value and more in as little as a few minutes, theoretically.
So trying to equate a volatile day-traded asset with an inflation hedge isn’t really apples to apples, which really should be a wake-up call for any investor who’s trying to work the market this way. Look for new moves by Bitcoin, Cardano, Ethereum, Dogecoin and others to show clues of crypto future values.
