Sunday 16 May 2021 11:24 pm

Bitcoin gets the jitters as Elon Musk's curious meddling continues

Bitcoin hit some unfamiliar depths over the weekend as Elon Musk continued his testy Twitter tirade.

Fresh from his sudden announcement that Tesla would no longer accept Bitcoin (BTC) owing to environmental concerns, the South African entrepreneur again put the boot in with a series of messages and arguments over cryptocurrency.

Twitter timelines turned toxic by Sunday evening as bickering and spats broke out on almost every thread between supporters of the 49-year-old Tesla chief and Bitcoin fans who seem unable to forgive Musk’s recent and seemingly calculated attempt to crash the market.

BTC had already been suffering the hangover over Tesla rejection as it headed into the weekend clinging to $50,000 by its frayed fingernails, flirting with $49k and $47k before a Twitter fall out erupted.

READ MORE: Bitcoin rocked by Elon Musk’s dramatic Tesla announcement

British-based commentator Peter McCormack – the brains behind The What Bitcoin Did podcast – fired the first salvo. It was an almighty cluster bomb of 24 posts picking apart Elon Musk’s continued fawning over Dogecoin and sudden acerbity with Bitcoin.

The detail was impressively cold-blooded, an almost pre-planned effort to get a rare rise from the man who has appointed himself as “The Dogefather”.

And a rise he got.

Elon Musk fired back sharply with “Obnoxious threads like this make me want to go all in on Doge”.

Predictably, the price of Dogecoin jerked upwards, and Bitcoin began to slide.

The blue touch-paper had been lit, and the fireworks were quickly filling Twitter’s atmosphere.

Dogecoin’s generous godfather had taken the bait, and his appetite for dangling hooks was clearly ferocious.

READ MORE: Doge dumps hard after Elon Musk’s SNL debut

“Elon, while the thread is a bit adversarial in it’s tone, it does have its truth in that Dogecoin is orders of magnitude more centralized in both terms of node count and supply distribution than existing cryptos like Bitcoin, people will lose money when these whales dump,” reasoned the @ChainLinkGod account.

Within seconds, Musk hit back.

“Bitcoin is actually highly centralized, with supermajority controlled by handful of big mining (aka hashing) companies,” he snapped.

“A single coal mine in Xinjiang flooded, almost killing miners, and Bitcoin hash rate dropped 35%. Sound “decentralized” to you?”

And so the unsightly exchanges rumbled on. There was even a veiled and eyebrow-raising threat of Tesla dumping all its Bitcoin holdings, but how serious that was may depend on the mood the social media goading has left the fiery Tesla chief in.

All in all, the weekend’s curious clashes have left an unpleasant aroma in the air. The narrative and sentiment has seen plenty of traders and analysts scratching their heads as they try to figure out what’s really going on.

Questions have been raised about the motivation behind Musk’s wanton vandalism in the cryptocurrency markets.

It seems almost ludicrous to many that, after Tesla purchased $1.5 billion in Bitcoin earlier this year, Musk would then actively and deliberately reduce it to rubble.

And while they were beginning to ponder, the price of Bitcoin took an alarming dip below $45k – a place many did not expect to ever see again, especially after last month’s all-time high above $62,000.

READ MORE: Dogecoin inventor takes a swipe at “self absorbed” Elon Musk

Instead, there is a growing sense that Musk – clearly not a dim-witted businessman – has something up his sleeve. In many circles it is thought he is playing a long game, using his obvious influence to push the market down, then snap up another enormous amount of BTC before announcing that Tesla had made its peace with the flagship cryptocurrency and would accept it as payment again.

There have even been suggestions that he is working on a solution to deliver the clean energy required to power Bitcoin mining, therefore eliminating much of its environmental impact.

If this is indeed the case, then the masterful genius of the SpaceX supremo will be revealed. Could it be possible that he might get away with manipulating the price of Bitcoin down, investing billions more into it, produce a copyrighted and proven way of delivering clean mining energy, then drive the price back up on the back of it?

If this is the case – the real truth of the matter – then surely it would be a toss-up for labelling it either one of the most momentous market masterstrokes ever made, or one of the greatest heists in history.

Either way, the notion of Musk blindly bludgeoning his way through mistake upon mistake throughout this whole sorry saga appears increasingly to be the unlikeliest of these wild and fanciful theories.