The Week Of Living Dangerously
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The last seven days were a true eye of the crypto cyclone. Memecoins, Elon Musk tweets, Ethereum gas prices - all the biggest talking points suddenly coming together in one maelstrom. It started from the memecoin - the Shiba Inu skyrocketed to the moon and beyond. Its claim to fame was the eponymous mutt from the Dogecoin logo. The bullrun was enough to create a few fresh crypto millionaires and completely gum up the Ethereum network. Trades on the network set users back as much as 300$ on decentralized exchanges. Non Shiba-Inu transactions were delayed and put on hold wherever humanly possible, as the crypto world waited impatiently on the memecoin flavor of the month to fade.
Salvation came from an unlikely corner - Vitalik Buterin donated 10% of the Shiba Inu marketcap towards covid relief in India. You might ask where he got these - the coin creators sent 50% of the total supply to Vitalik as an experiment. Buterin‘s donation crippled the Shiba Inu run, effectively stalling it and with it the ERC 20 gas crisis. Someone cynical might claim Vitalik killed off two birds here - snuffed out a stifling influence on his creation, the Ethereum network and creating singificant goodwill. To be fair the Ethereum creator is known for his indifferent attitude towards money and issued a statement asking further coin creators to abstain from sending him any further crypto.
At this point everything was getting back to normal, but then Elon tweeted Tesla will cease accepting Bitcoin due to environmental concerns. The energy cost of BTC mining is a valid discussion point. However when the crypto community pointed out most mining now uses renewable energy, Elon doubled down on his assertion. As Tesla is a major BTC owner and Musk a cult figure in crypto circles, his bearish tweets sent the whole crypto market into a tailspin. It culminated in today‘s selloff, sending BTC well over 50% under the all time high.
Musk‘s actions created a backlash within the crypto community with multiple tounge in cheek references to „not buying any more Teslas“ by various industry outlets. On a certain level this reaction was typical. The crypto community has always had strictly defined borders. You were either friend or foe. Friends were revered, and foes ridiculed, sometimes in quite creative fashion. Powerful allies like Musk were especially coveted, their tweets moved markets. Vitalik Buterin was seen as a creator of worlds, a god-like figure. While every community needs heroes, the crypto community had idols, whose words were often treated as subsitutes for analysis and research. The backlash against the two biggest names in the crypto universe is a welcome sign as it might lead to higher market resilience. The strength of crypto are not the words of its prophets but the idea behind it. The less people use figures of authority as a subsitute for the eponymous DYOR („do your own research“), the more mature the market will become.