Week in Review - Elon Musk: Cryptoking

Saturday, May 15, 2021 • By Lucas Matney

Hello friends, and welcome back to Week in Review!

Last week, I wrote about Facebook’s never-ending Trump problem. This week, I’m looking at Elon Musk’s wild week of market manipulation.

If you're reading this on the TechCrunch site, you can get this in your inbox from the newsletter page, and follow my tweets @lucasmtny.

The big thing

This week, Elon Musk nearly crashed the crypto markets with a tweet.

Musk has been anything but predictable but retail and institutional investors are also anything but dismissive of his ability to pump up markets — especially if there’s a good joke to tell in the meantime. A few days after he crashed Dogecoin because of his appearance on Saturday Night Live where he called the currency a “hustle,” he drove the price of Bitcoin — a cryptocurrency with a $1 trillion market cap –down as much as 17% with a tweet basically noting that he now believes Bitcoin is bad for the environment and that Tesla will not be accepting Bitcoin payments for its cars after all.

More on that tweet here.

The impact was immediate and crypto investors flooded into his mentions pleading for mercy and complaining to each other in public and private that he shouldn’t have been so rash. Unrelated coins across the cryptosphere dipped as investors worried whether the tweet, shipped at a tenuous moment for this bull run would drag the space down to earth. A later tweet that he was working with Dogecoin developers directly on improving its efficiency sent the joke coin (worth billions of dollars) surging and supplied crypto investors with a worrying insight that perhaps this was all just a joke to Musk.

Musk has had his own dealings with the SEC in recent years, but his market moving tweets have seemed dubious at times but have generally seemed to be just another case of him trolling. Tesla’s investment in Bitcoin has complicated this somewhat, and while it’s not known whether he actually has holdings of Dogecoin, he’s certainly put himself in a less flexible legal arena when his company has a billion dollar stake in the fortunes of Bitcoin which he seems to lord control of over with his Twitter.

Retail investors aren’t used to blowing up a billionaire’s mentions and eliciting a response and there’s a certain irresistible power that comes with that especially for pumping nascent bets like Dogecoin, but I suspect that there’s going to be some reticence among a certain class of investor to invite Musk’s brand of randomized volatility into their asset.

Image Credits: Dan Kitwood / Getty Images

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Other things

Here are the TechCrunch news stories that especially caught my eye this week:

Uber and Lyft supplying free rides to vaccine appointments
In an effort to get more Americans vaccinated, the Biden White House has partnered with Uber and Lyft allowing riders to get free rides to and from vaccination sites, covering up to $15 each way.

State attorneys tell Facebook to nix Instagram for Kids app
Attorneys General representing some 44 U.S. states and territories signed a letter pressuring Facebook to abandon its plans to create a version of Instagram designed specifically for kids.

Burning Man plans for a virtual year
The Covid-19 pandemic has taken yet another year of Burning Man away from attendees. The festival in the Nevada desert has been a favorite of high-profile tech executives, but this year they’ll have to settle for a wholly virtual experience.

Ethereum creator donates $1 billion to India Covid recovery
One of the wildest story of the weeks involves the creator of Ethereum dumping billions of dogecoin copy cats that were unceremoniously gifted to his account, donating them to a host of charities. He donated some $1.5 billion worth of cryptocurrencies in total.

Amazon nukes accounts of some major Chinese sellers
Alleging fake reviews and behaviors that violated its store policies, Amazon took the nuclear option on a number of massive Chinese sellers on its platform that were responsible for billions in merchandise value. Those account holders aren’t too happy and Amazon isn’t too repentant.

GasBuddy hits top of App Store
In the wake of the Colonial Pipeline attack, several states in the eastern United States were left with gas shortages, pushing the gas-finding app GasBuddy to the top of the App Store for the first time ever.

Extra things

Some of my favorite reads from our Extra Crunch subscription service this week:

The Expensify EC-1
“Let’s make it clear from the outset that this story is about an expense management SaaS business called Expensify. As you'd expect, yes, this is about the expense management market and how Expensify has grown, its technology and all of that. Normally, that would make us change the channel. But this is also a story about pirates; peer-to-peer hackers who asked, "Why not work from Thailand and dozens of countries across the globe?" and actually did it using P2P hacker culture as a model for consensus-driven decision-making — all with pre-Uber Travis Kalanick in a guest-starring role..”

Is there a creed in venture capital
“Entrepreneurs and investors should recognize that contracts are worth very little without the ongoing relationship management that keeps all parties aligned. Enforcement is so unusual in the world of startups that I consider it a mostly dead-end path. In my experience, good communication is the only reliable remedy. This is the way.“

5 ways to raise your startups PR game
“I get emails every week from companies coming out of stealth mode, wanting to make a splash. Or from a Series B company that's been around for a while and hopes to improve their branding/messaging/positioning so that a new upstart doesn't eat their lunch. How do you make a splash? How do you stay relevant?”