Stop letting random musings on bitcoin from Tesla CEO Elon Musk influence your decisions on how to trade the cryptocurrency and remain focused on the fundamentals, said one crypto expert
When Yahoo Finance Live asked Grayscale CEO Michael Sonnenshein if traders should ignore Musk's comments on bitcoin, Sonnenshein said, "yes." Grayscale bills itself as the world's largest digital currency asset manager, managing various crypto ETFs.
As usual, traders in bitcoin (BTC-USD) were far from ignoring Musk on Thursday.
Bitcoin prices plunged by more than 10% as Musk voiced concerns over bitcoin mining practices.
“Tesla has suspended vehicle purchases using bitcoin,” Musk wrote on his Twitter account Wednesday evening. “We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
Musk continued, “Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment."
Sonnenshein noted that: "This is an opportunity for the entire crypto space to really think about moving the narrative towards something that's a little more solutions-oriented when it comes to energy consumption."
Musk's comments also put severe pressure on dogecoin (DOGE-USD), which plunged 32% by afternoon trading Thursday. Ripple fell 25%.
"If your conviction hasn't changed and you still believe in the role that bitcoin can play in your portfolio and you can buy cheaper than you could yesterday, that's a compelling trade for a lot of investors," Sonnenshein said.
Skybridge co-CIO Troy Gayeski echoes Sonnenshein's view. (Skybridge recently started managing bitcoin as an investment for clients).
"If you have any exposure to crypto, even bitcoin which is by far and away the least volatile, you have to be prepared for 20% to 30% pullbacks," Gayeski said on Yahoo Finance Live. "But if you step back and think of the macro environment, you're in an environment where you have unprecedented monetary stimulus. We are stilling growing money at a 16% to 18% pace, and then we have budget deficits as far as the eye can see. If you have concern about storing value in an easily transmittable medium, it's time to own bitcoin not only for return prospects but potential to protect you against never-ending currency debasement."
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