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How much of Bitcoin’s price dive is Elon Musk’s doing?


Though Bitcoin’s price is down more than half from its April peak of $64 899, it is still up around 200% over 12 months. However, the most recent price drop reminded investors that Bitcoin remains an extremely volatile asset.

Much of the recent slide has been placed at the feet of Tesla CEO Elon Musk. He announced in February that Tesla purchased Bitcoin to the value of $1.5 billion, which prompted a surge in the price. Tesla was quick to sell 10% of its newly acquired Bitcoin near the peak price. However, weeks later, Musk seemingly changed his tune and tweeted that Tesla would no longer accept the cryptocurrency as payment for its vehicles due to Bitcoin mining’s harmful impact on the environment. This tweet sent the price into a downward spiral.

But, as some analysts have pointed out, Bitcoin was already due for a correction that followed each parabolic move up.

“I think it is unfair to place the blame for Bitcoin’s recent price drop squarely on the shoulders of Musk,” says Revix CEO Sean Sanders. “After a strong rise in the first three months of 2021, we started to expect some sort of a correction when Bitcoin failed to make new highs. The only question is how much of a correction. While Elon Musk’s remarks about the environmental issues around Bitcoin mining may have been the trigger for a selloff, they were accompanied by news that China’s banks were to stop providing trading, clearing and settlement for crypto transactions.”

Sanders notes that, like all new technology fighting for market share, Bitcoin has shown signs of volatility and points out that diversification offers protection against this.

The following chart shows the last three major Bitcoin price corrections over the previous nine years.

Bitcoin price in USD


This volatility is a typical characteristic of emerging technologies and is reminiscent of the internet sector in the late nineties.

The protection against Bitcoin’s volatility that diversification offers is illustrated in the following graph.

Bitcoin vs Revix Top 10 Bundle over 12 months

Source: Revix

Sanders says the history of cryptos is littered with short-term news announcements that appear to influence price, but prices have recovered to set new all-time highs over the long term.

“There’s been a blast of negative news lately about Chinese banks being disallowed to service crypto operators, while at the same time some excellent news out of El Salvador which will now allow Bitcoin as legal tender. It remains to be seen whether other countries will follow El Salvador’s lead, but this is a world first, and it is huge news.

Sanders says cryptos will continue to be volatile for some time as the asset class matures, but there are ways to hedge against volatile markets. “The basics of investing apply to cryptos. The key to all successful investing is diversification.”

How to reduce risks of investing in cryptos

A proven way to reduce risks in the crypto markets is to invest in a spread of different crypto assets, much like the JSE Top 40 or the S&P 500 index which holds many shares.

Revix offers three equally-weighted ‘bundles’. These bundles enable you to effortlessly invest in the largest cryptocurrencies at a low cost through a single investment.

The Top 10 Bundle is invested in the top 10 cryptos measured by market cap, with each crypto having a 10% weighting in the portfolio. The bundle is rebalanced monthly to ensure this weighting reverts to 10%. It includes Bitcoin, Ethereum, Cardano and Polkadot. The advantage of this bundle is that it provides exposure to new and emerging cryptos that frequently outperform Bitcoin’s already extraordinary growth compounding at 200% a year for the past 10 years. The price of this bundle is up 401% over 12 months, well in excess of Bitcoin’s 175%.

The Smart Contract Bundle, is invested in the top five cryptos, focused on the emerging technologies of smart contracts. Much like a contract, a smart contract enables the terms of an agreement or deal to be executed. Yet, what makes it ‘smart’ is that it can execute this contract without the need for a third party. This is where many people see the future of cryptos and blockchain technology. The price of this bundle is up more than 300% over 12 months.

The Payments Bundle, focused on five cryptos looking to revolutionise money and how value is transferred. It includes Bitcoin, Ripple, Litecoin and Stellar. The value of this bundle is up nearly 200% over 12 months.

Your crypto bundle is then automatically rebalanced each month, keeping you up to date with the fast-moving market without you having to lift a finger. This ensures that investors always hold the most prevalent and reputable cryptocurrencies that represent the broader market.

About Revix

Revix brings simplicity, trust and great customer service to investing. Their easy to use online platform enables anyone to securely own the world’s top investments in just a few clicks.
Revix guides new clients through the sign-up process to their first deposit and first investment. Once set up, most customers manage their own portfolio but can access support from the Revix team at any time.

For more information, please visit

This article is intended for informational purposes only. The views expressed are not and should not be construed as investment advice or recommendations. This article is not an offer, nor the solicitation of an offer, to buy or sell any of the assets or securities mentioned herein. You should not invest more than you can afford to lose, and before investing, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.

Brought to you by Revix.

Moneyweb does not endorse any product or service being advertised in sponsored articles on our platform.

Read More: How much of Bitcoin’s price dive is Elon Musk’s doing?

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