Are Elon Musk and Jack Dorsey Working in Tandem to Spread BTC FUD?
It has now become a routine for billionaires to disrupt the crypto space, after having been warmly embraced by millions. Elon Musk uses the platform of his fellow billionaire Jack Dorsey to spread Bitcoin FUD. Both can profit massively by buying Bitcoin at a discount.
The World of Crypto Starts to Mirror the Old Ways
Last year, we witnessed a historic transfer of wealth from the working to the billionaire class. If not rapid acceleration, it is a continuation of the widening wealth gap increase for the last two decades. As of Q1 2021, out of $129.46 trillion percolating in the US economy, $41.52 trillion belongs to the top 1%.
For contrast, that chunk of the pie is larger than the total US wealth in Q4 1999, at $41.04 trillion. Consequently, whales in the financial world are not only becoming more prevalent, but there seems to be a wipout of borders between the corporate and the governmental. One doesn’t have to look further than BlackRock, the world’s largest asset manager holding $9 trillion AuM. The corporate revolving door to the highest political offices has never spun faster:
- Brian Deese, BlackRock’s chief of sustainable investing department, now leading White House National Economic Council.
- Wally Adeyemo, BlackRock’s macroeconomic and geopolitical advisor, now as the President’s deputy treasury secretary.
- Michael Pyle, BlackRock’s global chief investment strategist, now chief economic advisor to Vice President Kamala Harris.
The current chair of the Federal Reserve, Jerome Powell, himself stated that he has been in frequent consultations with BlackRock’s CEO Larry Fink. Long before the word crypto became a staple of the public discourse, the stock market feared the wake of such whales. Either institutions or individuals, whales hold a sufficient amount of assets to shift their market price.
Not only can they place a buy wall so that bidders are forced to raise the price of their bids, but they can often take advantage of surrogates in the financial media, or even own the media outright as is the case with Amazon’s Washington Post. As this hyper-centralization of the economy blurs the corporate-government border, Bitcoin emerged as an alternative, decentralizing counter.
Whales in the Crypto Space
Relative to the global market capitalization of over $100 trillion, crypto space still constitutes a fraction of the pie. This creates a lopsided environment in which funds from one space can flood the other with effectively infinite cash. Consequently, crypto whales have a massive power over the market.
Although they tend to use private OTC (over-the-counter) exchanges to not ripple the ocean and scare the smaller fish, some crypto whales have become particularly problematic through other means. While Michael Saylor of MicroStrategy has positively influenced the market with his investments and intellectually substantial public discourse, Elon Musk tends to have a chaotic effect, basing his output on hollow memetics about dubious DOGE coins.
In particular, on May 19th, Elon Musk was the key co-contributor to the historic crypto crash, combo-ing the blow alongside the “China crackdown” narrative that conspicuously popped up simultaneously.
The withdrawal of BTC from Tesla’s payments was less important than the reason Musk gave for it. He effectively framed Bitcoin as not eco-friendly enough, despite the facts saying otherwise.
In turn, this eroded the legitimacy of the dominant crypto by directly positioning it against the prevailing climate change narrative. As the king of subsidies tapping into the government-corporate pool since the days of PayPal, one can only speculate on his motivation. The fact remains, Musk established himself as the crypto disrupter, thanks to his 57 million followers, which constitutes a greater mediatic force than the respective population of his homeland, South Africa.
Musk’s Inane Joke Tweet Causes Another Crypto Crash
Musk’ influence on crypto space has now gained a life of its own. As cemented crypto influencer, other whales and mini-whales observe Musk’s tweets and anticipate how people would react based on them. Consequently, Musk greeted us with another mini-crash yesterday, dropping BTC under $31k again, unraveling its steady recovery from the China miners exodus.
Because Bitcoin acts as the anchor for the entire crypto space with the largest market cap, it plunged DeFi as well, with Ethereum as its leading representative.
This is quite telling because Ethereum’s upcoming gas fee restructuring, in addition to its scalability and consensus upgrade, is poised to create massive upward price pressure. You can read more about its details in this excellent thread by Evan Van Ness, the editor of This Week in Ethereum.
Although Musk’s Twitter escapades are eroding his reputation as well, with an increasingly negative-to-positive sentiment ratio on his timeline, there is little anyone can do to change the course of this corrosive dynamic. Elon Musk is deeply embedded in governmental dealings, and the SEC’s mission to protect investors is unlikely to extend into the grey zone of vague proclamations and allusions from the crypto pope.
Jack Dorsey Says Both Twitter and Square Have a Role to Play in Bitcoin
By the same token, Jack Dorsey, the CEO of Twitter, is also the owner of Square, which had reported $3.51 billion in Bitcoin Q1 2021 revenue via its Cash App. Interestingly, Dorsey stated this week in an interview with Business Insider that Bitcoin is more important to him than both Twitter and Square.
“Bitcoin changes absolutely everything, and what I’m drawn to the most about it is the ethos – what it represents, how conditions that created it are so rare and so special and so precious. And I don’t think there’s anything more important in my lifetime to work on,”
Unfortunately, the interviewer failed to probe him on the pervasive Bitcoin FUD spreader on his platform. However, both will meet at a Bitcoin event called The B Word scheduled to take place on July 21. If the conference is to be open for Q&A, perhaps some new insight could be gleaned.
One thing appears to be certain though. Elon Musk doesn’t care that he scares off thousands of unseasoned Bitcoin investors and wipes out their wealth. Fortunately, as millions of people have granted him his lofty influencer position, he seems to be adamant to devalue it. The question is, how long will it take.
Do you think Iron Man movies were the first stepping stone in creating Musk’s public persona and elevating him to his current status? Let us know in the comments below.