After the recent double-digit increases, Bitcoin’s price is too high, believes BitMEX CEO, Arthur Hayes. Prior to Hayes, Tesla’s CEO Elon Musk made the same controversial comment regarding the stock price of his company. Consequently, TSLA dropped by over 10% in half an hour.
Arthur Hayes: Bitcoin’s Price Is Too High
The turbulent price developments in the cryptocurrency world this year alone, took Bitcoin and most coins on a wild ride. The primary digital asset started the year at $7,150 before reaching a yearly high of $10,450 in February. The massive sell-offs during the most significant times of fear caused by the COVID-19 pandemic resulted in BTC bottoming at $3,700 in mid-March.
The asset’s price has fully recovered since then without the assistance of world governments and central banks. Moreover, Bitcoin is currently outperforming all other investment options in terms of yearly gains.
Despite all of those, however, Arthur Hayes, the CEO of the popular margin trading exchange BitMEX, made a somewhat controversial comment regarding its current value:
Bitcoin price is too high imo
— Arthur Hayes (@Cryptanzee) May 1, 2020
While it may appear as innocuous on the surface, Hayes is among the most influential people in the cryptocurrency industry. Therefore, his words could make a serious impact and even be accepted by some community members as financial advice. This may trigger additional panic sell-offs.
Such sell-off, of over 10%, is witnessed on Tesla’s stock (TSLA) after Elon Musk had tweeted something similar earlier today. Would Hayes benefit from such sell-off? There are two sides to this – his leading exchange, BitMEX, sees more volume due to increased volatility.
However, since BitMEX’s primary currency is Bitcoin, we can also say that it might be against Hayes’ interest to see Bitcoin’s price crashing.
Previously, Chanpeng Zhao (CZ), the CEO of the leading cryptocurrency exchange, Binance, made similarly controversial comments. He went even further by hinting that not holding Binance’s native cryptocurrency (BNB) could be a bad play in the future.
Musk Does It First
Hayes may have simply reiterated a similar tweet by Elon Musk. The CEO of the American electric vehicle company, Tesla, made an identical observation regarding his company’s stock price. His words, however, had an immediate adverse effect.
Tesla’s stock went down by nearly 11% from $768 to $686 in a matter of minutes, before regaining some value and trading now slightly above the $700 mark.
Musk has a history of questionable tweets regarding his plans or views of Tesla. The US Securities and Exchange Commission filed charges against the prominent entrepreneur in 2018, following his comments that he was considering taking Tesla private after securing the necessary funding.
Ultimately, both parties reached a settlement agreement after Musk paid a $20 million fine and stepped down as the firm’s chairman.
Signing the agreement allows him to post on Twitter, within certain limitations, without fear of being held in contempt for violating an earlier court order. If he wants to post about particular events or financial milestones, however, he has to receive approval from a securities lawyer. The SEC has not addressed Musk’s latest stock price comments at the time of this writing.
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