Bitcoin hits three-month low as concerned investors exit

• Bitcoin has slid to a three-month low as investors fled following a suggestion from billionaire Elon Musk that Tesla is considering or may have already sold its holding
• Last week, Musk said Tesla would stop taking bitcoin as payment for its vehicles, citing environmental concerns
• There is now speculation regarding Musk’s comments on Twitter over the weekend, and whether or not he confirmed the sale of Tesla’s holding
• For an asset class that has seen such tremendous growth over the last 12 months in particular, many people are calling time on the wild ride
• Bitcoin fell more than nine per cent on Monday to US$42,185 (roughly A$54,424) — its lowest since February 8

Bitcoin has slid to a three-month low as investors fled following a suggestion from billionaire Elon Musk that Tesla is considering or may have already sold its holding.

Musk has been a driving force behind cryptocurrency markets with his firm enthusiasm for the digital asset. However, his stance on bitcoin has appeared to shift in recent days to its one-time parody, dogecoin.

Bitcoin fell more than nine per cent on Monday to US$42,185 (roughly A$54,424) — its lowest since February 8.

Last week, Musk said Tesla would stop taking bitcoin as payment for its vehicles, citing environmental concerns about the use of energy to process transactions.

According to data from the University of Cambridge and the International Energy Agency, bitcoin “mining” uses roughly the same amount of energy each year as the Netherlands did in 2019.

A Twitter account called @CryptoWhale said yesterday that those holding bitcoin “are going to slap themselves next quarter when they find out Tesla dumped the rest of their #Bitcoin holdings. With the amount of hate @elonmusk is getting, I wouldn’t blame him…”

Musk replied: “Indeed.”

Indeed

— Elon Musk (@elonmusk) May 16, 2021

It is not clear whether Musk was confirming the sales or whether he referred only to the fact that he had faced criticism.

Last week Musk said Tesla would not sell its bitcoin would resume transactions as soon as bitcoin mining moves to more sustainable energy. However, the cyrptocurrency has dropped by almost a quarter since that announcement.

For an asset class that has seen such tremendous growth over the last 12 months in particular, many people are calling time on the wild ride.

“Our weekend trading has kicked up, and we’re looking at some serious liquidations through the exchanges,” said Chris Weston of brokerage Pepperstone in Melbourne.

“I am closing the short-bitcoin/long-ethereum trade and moving to the sidelines, as I feel the dust really needs to settle here,” he said.