Goldman Sachs, Morgan Stanley Investment Products Face Setback
21% Drop in a Week... Musk Impersonator Scam Emerges
Tesla CEO Elon Musk visited the construction site of the Tesla Gigafactory located in Gr?nheide near Berlin, Germany, on the 17th (local time). Gr?nheide, Germany ? Photo by Reuters
[Asia Economy New York=Correspondents Baek Jong-min and Kim Su-hwan] Elon Musk, CEO of Tesla, has become a headache for Wall Street investors. Once the ‘leader’ who drove the surge in cryptocurrencies, he has now turned into a ‘bad boy’ causing market anxiety, hindering the expansion of the market base.
Bloomberg reported on the 17th (local time) that Musk is dampening Wall Street investors’ enthusiasm for cryptocurrency investments. Musk’s tweets, which once justified Wall Street’s investment in the cryptocurrency market, are now instilling fear in Wall Street.
A Cold Shower for the Cryptocurrency Market
On Wall Street, concerns are rising that the market’s volatility triggered by Musk’s words is limiting the inflow of institutional investors and major players. For investors looking to buy Bitcoin as an inflation hedge, it is difficult to invest in a product whose price fluctuates nearly 25% within a week.
Especially recently, major investment banks such as Goldman Sachs and Morgan Stanley, as well as many U.S. banks, are either preparing to launch or have already launched cryptocurrency-related investment products. Musk’s sudden remarks are pouring cold water on the cryptocurrency market. Cryptocurrency specialist media Decrypt reported that Musk’s reversal of his stance on Bitcoin has worsened the overall sentiment in the cryptocurrency market. Felix Dien, founder of MVPQ Capital, said, “With weakened investment momentum and the spotlight on environmental issues, demand for (cryptocurrency) investment is expected to decrease.”
In fact, the cryptocurrency market has shown weakness overall following Musk’s Bitcoin-related comments. According to the cryptocurrency exchange Upbit, as of 5:30 p.m. on the 17th, out of 117 cryptocurrencies listed in the Korean won market, prices of 106 (90.6%) have fallen compared to a month ago. Bitcoin dropped 21.7% and Ethereum fell 12.96% compared to a week ago.
Meanwhile, Musk has become a public enemy within the cryptocurrency community. Billy Markus, one of the developers of Dogecoin, even appealed for restraint, saying, “There should be no war between Bitcoin and Dogecoin. They can coexist and help each other.” Forbes pointed out, “It seems Musk has taken on a one-man mission to dismantle Bitcoin like plucking petals from a tulip,” adding, “Musk certainly highlights Bitcoin’s weaknesses, but his long-term influence on cryptocurrency may be minimal.”
Although cryptocurrencies have recently been on a downward trend, some argue that it is too early to conclude that the market has entered a full-fledged correction phase. Cryptocurrency analytics firm Glassnode analyzed on the same day that the recent Bitcoin price adjustment is similar to corrections during the 2016?2017 bull market and that the upward trend does not appear to be over yet.
Scammers Impersonating Musk Appear
According to the U.S. Federal Trade Commission (FTC) on the same day, cryptocurrency scam losses in the U.S. from October last year to March this year surged about 1000% compared to the same period the previous year. Individuals impersonating Musk approached investors, deceiving them into investing in cryptocurrencies that promised multiple times returns, and embezzled $2 million (about 2.3 billion KRW). The FTC stated, “From October last year to March this year, there were about 7,000 victims,” and the total damage exceeded $80 million (about 91 billion KRW). The number of cases increased 12-fold compared to the same period last year, and the amount of damage surged nearly 1000% during the same period.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
