Tesla founder Elon Musk has issued a warning to potential bitcoin and cryptocurrency investors following the recent $2 trillion cryptocurrency market crash. The crash wiped out two-thirds of the combined value of bitcoin, ethereum and other cryptocurrencies on the market since its all-time high in 2021, dropping steadily since. Mr Musk, who once championed cryptocurrencies, has said that he wouldn’t advise anyone to invest in cryptocurrency. “Maybe you should [invest], but let me advise you, that would be perhaps unwise,” he said at the Wall Street Journal’s CEO Council Summit in London. Despite his words of caution, Mr Musk also affirmed his fondness for dogecoin, a cryptocurrency initially created as a joke, because it features his favorite animal.
Since the market crash, dogecoin has followed the same downward trajectory as bitcoin and ethereum, losing 90% of its all-time high value. Bitcoin fared slightly better, dropping roughly 60%. Despite the market’s recent volatility, some companies, like Microsoft and Goldman Sachs, are investing in blockchain technology with the goal of creating new cryptocurrency models and forming a foundation for future price surges.
During the bitcoin market’s peak, investors placed high stakes on digital currencies, fueling a crypto mania and creating a sense of FOMO, or fear of missing out, in those who hadn’t bought in yet. Now that the market has crashed, the question of whether or not to invest in cryptocurrency poses a significant risk for investors. For now, it seems the market is uncontrollable and digital currency is a volatile asset that may yield risky returns.
While digital currencies have been known to crash periodically, the recent market collapse demonstrates how quickly fortunes can be lost (and potentially made) in the volatile crypto landscape. Some experts predict that another bull run is possible, but it’s important for investors to tread carefully and do their research before hopping on the digital currency train. For now, Musk’s warning may be well-founded advice for those considering investing in digital assets.
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The material in this article is written on the basis of another article.