Sounds ridiculous, doesn’t it?
That something as tiny as a tweet could trigger a massive selloff of the highest performing stock out there.
Well, that’s exactly what happened earlier this month.
And it could very well happen again.
Especially if there’s fire behind the Twitter smoke.
Remember back in 2015 when Bitcoin wasn’t a “serious” stock and weighed in at a hefty $200 per share?
I know. Sounds like a pipe dream now.
These days it’s hovering around a whopping $56k per share and everyone, including the big banks, are now on the bandwagon.
As any savvy investor knows, the same volatility responsible for its meteoric rise could bring it crashing back down at any time.
And a recent sketchy tweet by Twitter handle @Fxhedgers offers proof of that.
Now I don’t say “sketchy” to disparage anyone, but the tweet went a little something like this:
“U.S. Treasury to charge several financial institutions for money laundering using cryptocurrencies.” – Sources
The internet quickly did its thing and the tweet went viral.
Almost immediately after, Bitcoin had a huge selloff, with stock value dropping $9,000 to $51,541.
Although there’s no smoking gun tying the drop off to the tweet, there was nothing else going on to trigger such a negative reaction.
Speaking of smoking guns, none of these financial institutions were named.
Not only that, there’s been no word of confirmation from the U.S. Treasury Department, nor any other verifiable, identifiable source.
So far, it’s literally an internet rumor.
Usually when these kinds of scandals happen, there’s a questionable memo or a wrongfully ousted employee blowing the whistle.
In this case, there’s not even so much as a TMZ picture of the CEO leaving a hotel with a giraffe that’s not his wife.
Jokes aside, there’s no evidence beyond the tweet, yet the flash crash of the stock was just as real as you or me.
Real people lost real money, based on what appears to be a rumor.
Bitcoin is clearly a dominant force in the market, and it’s not going away any time soon.
And if you’re in the right place at the right time, you can make a killing on a well-played pullback.
But is that potential gain worth these astronomical levels of price volatility?
That’s a question you have to ask yourself.
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