Some Have Accused Elon Musk of Being Part of a BTC Pump and Dump Scheme

Some Have Accused Elon Musk of Being Part of a BTC Pump and Dump Scheme

May 2, 2021

Tesla and Elon Musk are earning some criticism after it was made clear recently that the South African entrepreneur may have sold some of the bitcoin that the company purchased back in February.

Elon Musk Has Raked in Some Serious BTC-Based Dough

Two months ago, the electric car firm made history by serving as one of the primary institutions to back bitcoin publicly. The company purchased more than $1.5 billion worth of the world’s number one digital currency by market cap, and the asset ultimately rose to a new all-time high of more than $57,000. However, since then, it looks like Tesla has cashed in on some of that profit, selling more than $200 million worth of the initial BTC it bought, and some people are not taking this news well.

A few industry heads have criticized Musk and accused him of instigating a pump and dump scheme, in which BTC was bought by a major company to potentially get people talking about it and investing in it only to sell it once people were in and cause an inherent drop. While it cannot be claimed for sure that Tesla’s selling of BTC had anything to do with the recent fall of the asset’s price, it does seem a little coincidental that the currency incurred a drop of roughly $14,000 right as this news is coming about.

Bitcoin was trading for a new all-time high just a few weeks ago after Coinbase officially debuted on the Nasdaq. However, the momentum failed to last for a significant period, and it was not long before things died down and bitcoin’s price dropped into oblivion. While the currency has recovered somewhat – it is presently trading for just under $55,000 – the asset was, at one point, going for around $49,000.

But Musk has made it clear that there was no pump and dump at work. In fact, he claims that while Tesla may have sold some of its BTC and raked in some profit, Musk has not followed the same course, meaning all his personal bitcoin remains in his digital wallet. The knowledge came about after Musk got into something of an online argument with Dave Portnoy, the founder of Barstool Sports, who pointed the finger at Musk and accused him of funny activity with his digital cash.

In a recent tweet, Portnoy says:

So, am I understanding this correctly? Elon Musk buys bitcoin. Then he pumps it. It goes up. Then he dumps it and makes a fortune.

Laying Out the Truth

Musk was quick to defend himself and knock Portnoy’s words down. He wrote back:

No, you do not. I have not sold any of my bitcoin. Tesla sold ten percent of its holdings essentially to prove liquidity of bitcoin as an alternative to holding cash on its balance sheet.

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