Last week, I wrote how Elon Musk’s tweets interrupted one of my first post-pandemic dinners with friends.That was when he announced that Tesla (TSLA) would no longer be accepting bitcoin for the purchase of the company’s cars because of environmental concerns.My take was more cynical, saying that the real reason was that the company either realized or was warned that accepting bitcoin for major purchases creates anti-money-laundering concerns. To be fair, though, I couldn’t get too perturbed about getting an alert during dinner. The alert was shortly after normal business hours on the West Coast, so the timing was understandable. 

mage Source: Pexels

It’s the weekend tweets that bug me more.  Each of the past two weekends brought Musk tweets that required my paying attention to cryptocurrency markets.  I have spent decades getting used to the rhythm of the global markets.I began my career trading Australian stocks (among others), so I have been attuned to checking markets on Sunday nights (New York time) ever since. But I have always liked being able to tune out of market chatter from Friday afternoons after the special exercise and assignment deadline through Sunday evenings.It provided a necessary mental break after a stressful week.

Then bitcoin came along, bringing with it 24/7 trading.Oh, great.We have seen several significant weekend drops in bitcoin over the past few months.These falls came even during the midst of a staggering rally that saw bitcoin rally over fourfold in about 6 months.  I have posited that liquidity shrinks over the weekend, thus allowing moves to be magnified.I have also suggested that while the ability to trade cryptocurrencies without a break would be appealing to a generation raised on multi-player video games, it is detrimental to its acceptance as an investment.

To be fair, I expected some sort of Twitter (TWTR) frenzy two weekends ago.Elon Musk was hosting SNL and was widely expected to make some sort of comment on Dogecoin or Bitcoin.That was what we call a “known unknown”. His appearance on live television was widely anticipated, so it was rational for crypto traders to approach the show like equity traders do for a company’s earnings.We know that there is likely to be market moving news, but we don’t know what it will be.After SNL, Dogecoin bore the brunt of the damage and subsequent commentary by Musk. Dogecoin rallied sharply in advance of SNL, Musk joked about it, the coin fell sharply, then there were tweets about accepting Dogecoin as payment for a payload on a SpaceX flight that eased the losses. We knew something was likely to transpire, so that seemed like at least a version of business as usual.

Did anyone really need, want, or expect yet another series of tweets about cryptocurrencies from Musk yesterday though?A one word tweet response, “Indeed”, implied that he sold more of TSLA’s bitcoin stash, causing a roughly 10% drop.Then he put out some clarifying tweets that suggested the opposite, causing bitcoin to reduce its losses.

The key element to me is that bitcoin was unable to fully recoup its drop today.In fact, it is currently down over 10% from its Friday “close”.Worse, it is down over 20% from its levels prior to Musk’s SNL appearance.While long-term bitcoin “hodl-ers” are still sitting on huge profits, I have no choice but to believe that many of the traders who were attracted to bitcoin during its stellar rise have been losing patience. 

Does anyone want to be heavily invested in anything that is clearly subject to the whims and musings of a single influential individual?In the case of TSLA, maybe.There are numerous examples of highly successful companies that have been driven primarily by a visionary leader.While we can argue about TSLA’s valuation, the company produces tangible products that many utilize.Cryptocurrencies are a much more dubious proposition.Despite the various use cases for blockchain, we have seen slow adoption of cryptocurrencies for anything other than speculation – especially after TSLA removed one of the few opportunities to exchange bitcoin for legal purchases.

I know that many of the crypto faithful will not agree with this take, but it appears to me that traders and investors are tiring of seeing their holdings dragged around by the musings of Elon Musk and a few highly visible advocates – particularly when those musings occur over the weekend.It’s not abnormal to see some bloom come off the prices of any product that has risen sharply – cryptocurrencies included.I suspect that much of the reason for bitcoin’s pullback has been for many of the same reasons that it thrived in the first place.The freewheeling unfettered commentary from some of its widely followed oracles is now wearing thin.The 200 day moving average of bitcoin is in the 39,000 – 40,000 level.Let’s see if we test that range in the coming days, and whether we see tweets that support a bounce if we get there.