Cryptocurrency market loses 23 per cent of its value in five days

The value of the cryptocurrency market has slipped by an astonishing 23 per cent in the last five days – and one man is partly to blame.

The value of the cryptocurrency market has plunged by an astonishing 23 per cent in the last five days – with recent comments made by Tesla CEO Elon Musk partly to blame.

According to data from CoinMarketCap.com, the market cap for global digital currencies was $1.97 trillion earlier this week – down from a recent peak of $2.56 trillion.

The slide in value comes after Musk hinted his electronic car company was considering selling all of its bitcoin holdings, announcing it would no longer be accepting it as payment for its hi-tech products. The move saw bitcoin’s price plummet roughly 35 per cent.

“The crypto world is in the danger zone … as no one has a handle over short-term momentum because of uncertainty on where Elon Musk stands on bitcoin,” senior market analyst at Oanda, Edward Moya, wrote in a note to Business Insider.

Tesla’s justification for no longer accepting bitcoin was because of the “insane” amount of energy needed to create new coins and secure the network.

“It seems unlikely that a massive financial institution will make a big bet on crypto in this current market as environmental concerns come to the surface,” Moya added.

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The value of the cryptocurrency market has plunged by an astonishing 23 per cent in the last five days.

Bitcoin fell below $43,000 on Monday – its lowest point since February. The prices of other cryptocurrencies – including dogecoin, binance coin and ether – all fell up to 10 per cent.

Musk “exercises his power to manipulate coins with some frequency and no apparent pattern”, former investment banker at Goldman Sachs, Matt Levine, wrote in a piece for Bloomberg.

The billionaire mogul later suggested that dogecoin could be a payment option for Tesla during his polarising Saturday Night Live appearance.

“Call me the Dogefather,” Musk said, playing fictional financial expert Lloyd Ostertag in a skit.

“Lately, prices have been soaring for cryptos like bitcoin, ethereum and especially dogecoin. Dogecoin actually started as a joke based on an internet meme, but now it’s taken over in a very real way.”

Musk declared crypto an “unstoppable financial vehicle that’s going to take over the world”.

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Recent comments made by Tesla CEO Elon Musk are partly to blame. Picture: Brendan Smialowski/AFP

Senior trader manager at Wave Financial, Justin Chuh, told Business Insider that a “pullback” in the market was inevitable.

“Everyone has been watching BTC fall, crashing 35 per cent from all-time highs, just within a month,” he said.

“Remember gravity and volatility? They exist. Some of the new crypto market entrants are about to have their first taste of risk.

“A pullback was bound to happen. But we have to accept that those voices chirping around on social media aren’t helping and can actually make moves. This is healthy, but I think we all wish this didn’t happen.”