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Is Elon Musk manipulating bitcoin? The big question after Tesla’s latest bombshell

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Aakash started in Nov 2018 as a writer at Revyuh.com. Since joining, as writer, he is mainly responsible for Software, Science, programming, system administration and the Technology ecosystem, but due to his versatility he is used for everything possible. He writes about topics ranging from AI to hardware to games, stands in front of and behind the camera, creates creative product images and much more. He is a trained IT systems engineer and has studied computer science. By the way, he is enthusiastic about his own small projects in game development, hardware-handicraft, digital art, gaming and music. Email: aakash (at) revyuh (dot) com

Following Tesla’s $1.5 billion investment in this cryptocurrency, the debate comes over whether the tycoon’s tweets about this technology sought to influence the market

Elon Musk, the founding tycoon of companies such as Tesla, PayPal or SpaceX, complies strictly and literally with the saying “every time he speaks, the bread rises“, and he knows it. All its movements are followed in detail at a global level and it can go from resuscitating a company with a small recommendation to provoking the momentum of another that has nothing to do with his recommendation, but has a similar name. Aware of the “Elon Musk effect“, he plays with it at will, and sometimes at the limit of the rules. Those movements on the wire are just what is being debated now after another code name of the markets crossed his path and with which he is toying once again: bitcoin.

This Monday, Tesla, as a public company, reported in a document delivered to the SEC (the United States Securities and Exchange Commission) that it had invested a total of $ 1.5 billion in ‘bitcoins’ during the month of January. A bombshell that has taken little time to appear on all social networks and media and that, obviously, has triggered the price of bitcoin more than 12% and Tesla shares a 2.5%. But there is a particularly dark point in all this and it is that Musk, CEO of the company, has been flirting with this and other cryptocurrencies for weeks and causing their price to volatilize even more in the same month that his company made the investment. And now many wonder if he could have committed a crime.

Although today everything has been blown up thanks to Tesla’s announcement, the truth is that Elon Musk has been playing with cryptocurrencies for weeks, especially with bitcoin and the ‘meme’ currency known as Dogecoin. What does ‘playing’ refer to? Well, he has been launching all kinds of messages about them, causing their prices to move with great volatility, generating peaks every time he mentioned them. On January 30, for example, he placed the hashtag ‘#Bitcoin’ in his Twitter ‘bio’, making its price go from about $ 32,000 to more than $ 37,500. Also, in an intervention on the Clubhouse social network, he praised the cryptocurrency and said it was “a good thing.”

Greater, and more controversial, was the feat achieved with Dogecoin, a ‘meme’ currency created as a joke and that has been crawling through the markets for years with touches of speculation. He started joking with this ‘token’ right after everything that happened with Gamestop, and thanks to its drag effect, which got other celebrities to mention it as well, it caused a rise of 65% bringing the value of the ‘meme’ closer to a dollar. His joke has been very frowned upon by the defenders of cryptocurrencies who believe that with it, he delegitimizes technology and puts its evolution at risk as well as the money of many people who follow him.

But after the passage taken by Tesla, a new scenario opens and the debate reaches a new scenario and that is whether Musk, through these jokes and controversies, was intentionally trying to manipulate the market, also knowing that his company had made a very important investment in one of the affected currencies and that could affect your own interests. If so, could he be investigated and convicted for it? There is where the limit of the rules that the tycoon seeks comes in.

An unknown terrain

The truth is that it would not be the first time that Musk has been investigated for a similar case. In 2018, the SEC took him to court for a series of tweets in which he assured that he had a plan to remove Tesla from the Stock Market and that caused different movements in the market. He was accused of misleading investors with false information and had to leave one of his positions with the company and pay a fine of $ 20 million, but this case is different. Why? For the regulation of cryptocurrencies and how you can deal with what happened this time.

As is already known, cryptocurrencies, and especially bitcoin, are characterized by deregulation and in this case, it is not clear if the SEC could take action on the matter due to what was done by the American businessman. Cryptocurrency experts confess that it is a rather unique case and at the limit of the laws, and others mentioned in media such as Bloomberg or the Markets.com portal assure that the case “raises a real question about possible market manipulation”.

At the expense of seeing what happens in the next few days, everything indicates that Musk’s future in this regard will depend on the decision made by the SEC. And the future of other entrepreneurs (Mark Cuban or Snoop Dogg have also followed thanks to Musk) or of the cryptocurrencies themselves may also depend on that decision. But what this makes clear is that even though it sounds like a game, Musk takes games very seriously.

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