The crypto market has lost 23% of its value in just the last 5 days

BTC vs. ETH 4
  • The market capitalization of global cryptocurrencies has dropped by 23% in just the last five days, according to data on CoinMarketCap.
  • The Bitcoin has fallen roughly 35% since hitting all-time high in mid-April as comments.
  • Tesla CEO Elon Musk has been responsible for recent swings in the cryptocurrency as he laments the amount of energy used to mine.
  • See more stories on Insider’s business page.

The value of the cryptocurrency market has slid by 23% in just the last five days. It’s been pulled lower by a sell-off in bitcoin most recently catalyzed by comments made by Tesla CEO Elon Musk.

The market cap for global digital currencies came in at $1.97 trillion on Monday, down from a recent peak of $2.56 trillion on May 12, according to data from CoinMarketCap.com.

“The crypto world is in the danger zone … as no one has a handle over short-term momentum because of uncertainty on where Elon Musk stands on bitcoin,” Edward Moya, a senior market analyst at Oanda, wrote in a note to Insider on Monday.

Bitcoin on Monday fell below $43,000 to its lowest point since February while other crypto prices suffered as well. Ether, the token of the Ethereum blockchain, was down nearly 8%, Cardano-ADA sank 10%, and Binance Coin fell about 9%. Dogecoin gave up 7%.

Solana was the only one of the 20 largest cryptocurrencies by market cap to gain ground Monday, up about 0.2%, according to CoinGecko.

Bitcoin dropped Monday after Musk on Twitter suggested Tesla might – or had sold – its holdings in the cryptocurrency. It slightly rebounded after Musk clarified that the electric vehicle maker still held its bitcoin stake. Bitcoin’s recent selloff was sparked after Musk last week said Tesla would stop taking bitcoin as payment because of the “insane” amount of energy needed to create new coins and secure the network.

“It seems unlikely that a massive financial institution will make a big bet on crypto in this current market as environmental concerns come to the surface,” said Moya.

Musk later suggested that Dogecoin may be a payment option for Tesla as he’s working with Dogecoin developers to improve system transaction efficiency.

Read more: ‘Wolf of All Streets’ crypto trader Scott Melker breaks down his strategy for making money using ‘HODLing’ and 100-times trade opportunities – and shares 5 under-the-radar tokens he thinks could explode

“Everyone has been watching BTC fall, crashing 35% from all-time highs, just within a month,” said Justin Chuh, senior trader manager Wave Financial, a regulated digital asset investment firm, in a note. “Remember gravity and volatility? They exist. Some of the new crypto market entrants are about to have their first taste of risk

He continued: “A pullback was bound to happen. But we have to accept that those voices chirping around on social media aren’t helping and can actually make moves. This is healthy, but I think we all wish this didn’t happen.”

Broad risk aversion that hit US stocks on Monday didn’t aid the cryptocurrency market, said Moya, and “retail traders on social media platforms TikTok and Twitter are losing confidence and are getting closer to hitting the panic button.”

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Elon Musk says dogecoin might be the future of cryptocurrencies – but tells fans they should still invest carefully

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Elon Musk has been at the centre of 2021’s wild cryptocurrency boom.

Elon Musk has said dogecoin could ironically become the future of cryptocurrencies, which could themselves become the future currencies of earth.

Despite the bold claim, the Tesla billionaire struck a somewhat measured tone, tweeting to his millions of followers on Friday: “Cryptocurrency is promising, but please invest with caution!”

Musk’s tweet linked to a video from celebrity news website TMZ, in which he warned: “First of all, I think people should not invest their life savings in cryptocurrency. To be clear, I think that’s unwise.”

Yet Musk added: “If you want to sort of speculate and, I don’t know, maybe have some fun, I mean, there’s a good chance that crypto is the future currency of earth.”

Asked about dogecoin, Musk said: “The point is that dogecoin was invented as a joke, essentially to make fun of cryptocurrency.”

He added: “Fate loves irony… What would be the most ironic outcome? That the currency that was invented as a joke in fact becomes the real currency.”

Yet Musk admitted there were problems with dogecoin – the meme asset that has rallied more than 25,000% over the last year to become the fourth-biggest cryptocurrency.

Asked whether dogecoin’s unlimited supply poses a danger to its price compared to bitcoin, which has a fixed supply, Musk said: “Yes, it does.” But he later repeated the mantra of dogecoin investors: “To the moon!”

Musk, the co-founder and chief executive of electric car company Tesla and the world’s second-richest person, has been right at the centre of the 2021’s wild boom in cryptocurrencies.

Tesla’s announcement in February it had bought $1.5 billion of bitcoin laid the foundations for a monster rally in the world’s most famous crypto asset. And his frequent tweets about dogecoin have been perhaps the main driver of the buzz around the meme token.

Analysts said the recent breakneck rally in dogecoin had come in part because of people trying to get in before Musk appeared on “Saturday Night Live” on May 8, where many predict he will riff on cryptocurrencies.

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