Elon Musk Accused of Bitcoin Market Manipulation By Top Economist

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Should the SEC investigate?

Stock image of Elon Musk
(Image credit: Shutterstock)

Just last week, news broke that Tesla had purchased $1.5-billion in Bitcoin to 'maximize returns on cash,' and somewhat unsurprisingly, eyebrows are being raised. As reported by Markets Insider, Economist Nouriel Roubini is accusing Elon Musk of market manipulation and stating that the SEC (U.S. Securities and Exchange Commission) should investigate.

The basis of Roubini's accusations stems from Elon Musk's tweets. Roubini accuses Elon of using his Twitter platform to pump up the price.

"For somebody like Elon Musk, who knows he has the market impact to manipulate, first take an individual position in Bitcoin, pump the price up, and then say that Tesla has invested." Roubini said in an interview with CoinDesk.

"And Tesla doesn't make any money yet, it's also irresponsible, and it's market manipulation. The SEC should be looking into people that have a market impact, and that manipulate the price of assets. That's also criminal behavior" - Roubini in an interview with CoinDesk.

Of course, it's important to note that at this time, not all the details are available. When the report landed, Bitcoin hadn't surged to the all-time high yet -- before Elon Musk started vocalizing positively about Bitcoin and other Cryptocoins on Twitter.

Pair that with rumors that Tesla is already selling at the new record highs, many individuals speculate that this was a move to reel in a bunch of cash and help Tesla to a good start to 2021. There are also rumors that Elon Musk has been deleting his Bitcoin tweets, but we are unable to confirm these.

Either way, it's unclear what's really going on -- which is why economists are demanding that the SEC investigates the transaction. 

Another Crypto Bubble?

Regardless of what really happened surrounding this transaction, it does appear we have found ourselves in another Crypto high. Mining, especially Ethereum is at an all-time high due to lavish profitability, which meanwhile is driving up the prices of graphics cards.

At the end of the day, it's gamers and individuals who buy crypto in these highs that lose.

Niels Broekhuijsen
Niels Broekhuijsen

Niels Broekhuijsen is a Contributing Writer for Tom's Hardware US. He reviews cases, water cooling and pc builds.

21 Comments Comment from the forums
  • Jim90
    Lots of ways 'big money' can make profits here.
    If Elon moves those Bitcoin shares onwards for profit...well then...that would be market manipulation - providing the it's within a 'short enough(!)' timeframe that authorities would have to act. However, there are long established ways very deliberately manipulate markets - particularly if you have the finds, and your activities are 'hidden and/or protected'.
    For the average Joe, that organised social media loophole (e.g. GameStop) will, unfortunately, become tightly 'controlled', for obvious reasons. I wonder if Elon purchased his Bitcoin shares through Robinhood??!!
    Reply
  • atomicWAR
    When Musk got slammed by SEC last time he well deserved it. Over his bitcoin twitter posts though? Common people are aloud an opinion and it is not his company this time he is jawing on about tweet by tweet. So far this is just stupid. It is Elon Musk though so I reserve judgement on his future actions/tweets....
    Reply
  • Endymio
    Click-bait story. There's nothing illegal about "pumping up" the value of something you own, be it stock, real estate, or crypto coins. It only becomes illegal if you make intentionally false or deceptive statements in that effort.

    In Musk's prior encounter with the SEC, he did apparently make the false statement that he had lined up venture capital to take Tesla private. But this? Looks like very little smoke, and no fire at all.
    Reply
  • waltc3
    I don't care when the big investors manipulate each other--I think that's funny. Individuals, however, who can't afford much in the way of losses should understand that the lure of "something for nothing" is just classic sucker bait. Caveat Emptor, always. Don't expect the SEC or anyone else to hold your hand or look out for you or protect you from losses.
    Reply
  • ginthegit
    Endymio said:
    Click-bait story. There's nothing illegal about "pumping up" the value of something you own, be it stock, real estate, or crypto coins. It only becomes illegal if you make intentionally false or deceptive statements in that effort.

    In Musk's prior encounter with the SEC, he did apparently make the false statement that he had lined up venture capital to take Tesla private. But this? Looks like very little smoke, and no fire at all.

    I think you are missing the point and the Click bait attitude towards the market idea is showing that the average Joe knows nothing of how the market works or what the Guys who ran the Gamestop fiasco were trying to do. Their whole point was not to make money, but to expose the system as being corrupt.

    The press want to make it into the story of "Hedge Funds get massacred!" Crap, which is not the lesson that was to be taught. The Guys teaching the lesson to the Public are not interested in the money, they are all more interested in showing people how BS the whole stock market system is.

    Lets look at the Stock market scam. It was made after the Federal Reserve act in the early 1900's to screw the public over. The government had no choice but to agree to sign a law that protected the Stock markets from crashing and the banks lose. The Federal reserve act was signed due to US gov selling too many bonds and not being able to make good on them. Bank of England bought up 90% of these bonds and called them in. Rather than the government letting the country default, it signed the Federal reserve act which allowed the Bank of England to control all the Finance in the USA. The whole FED (including the FBI and the CIA) are all owned and loaned to the Government of the USA by the FEDERAL RESERVE who is a Public entity owned by the Bank of England. Thank the congress for selling the USA out to England after winning the war of independence.

    So Now you have a stock market that is completely based on FIAT money. Its valuation is no not based on sales and prosperity of a company, but by someone (or a boards) choice of confidence, So when Steve jobs died, the stocks of apple dropped massively despite there being no drop in sales. It was all a choice. The insiders who learned of Jobs death first would buy all the shares up when news got out on a first dip basis and that for a reduced price. Then the price went back up again and all those new issued shares would lessen the value of the shares already owned, and place more power into the new buyers hand. This is exactly how Zukerburg screwed over his Business partner and co founder. It thus places ownership into hands of individuals it wants to own them, people easily controlled or prepared to join the club.

    And now it all becomes obvious. The game stock fiasco proved that the market is not only easy to manipulate, but also weak and ready to collapse. And who after its collapse will own anything? Just these mega owners and people like Bill Gates who is now the biggest owner of land in the USA. And he is either fallowing it, or pushing GMO crops that fail after the 9th gen of growth.

    Now the WEF is openly pushing the Great reset under Klous... it all makes sense. The system will collapse and those of the club will own everything and you will own nothing... and be happy!

    If you look up what Nathan Rothschild did in 1929, it is nearly identical to what Tusk and his mates are doing Nathan's move in 1929 started the great recession with the collapse of funds and everyone lost near everything. They made the whole middle and working class desperate and work like slaves for near nothing... The rich controlling the poor... and we all thought it just a bad fortune in history, and not controlled for purpose of complete control.

    The question is "Why do the rich want more money?" They get so rich but want more and more rather than retire... to what end?

    They will keep going until we are all under the new style of the Feudal system and we are all slaves....

    Welcome to Industrial revolution 4.0 Cos that is what the WEF is calling it... and you will be happy!!!
    Reply
  • schwatzz
    It's not Elon's fault that people buy something right after he says something
    Reply
  • Endymio
    ginthegit said:
    I think you are missing the point and the Click bait attitude towards the market idea is showing that the average Joe knows nothing of how the market works or what the Guys who ran the Gamestop fiasco were trying to do....
    An impressive wall of words, but it's clear you have no significant market presence or knowledge. The GameStop fiasco is not relevant to this situation, nor did "Roaring Kitty" expose any corruption, because there was none to expose.

    I had intended further remarks, but I've just reached the point in your post where you claim the FBI and CIA are being rented out by the Fed, itself secretly owned by England. I know when a mind is beyond help. Enjoy your belief system.
    Reply
  • superbeast406
    atomicWAR said:
    When Musk got slammed by SEC last time he well deserved it. Over his bitcoin twitter posts though? Common people are aloud an opinion and it is not his company this time he is jawing on about tweet by tweet. So far this is just stupid. It is Elon Musk though so I reserve judgement on his future actions/tweets....
    When Musk got slammed by the SEC last time he payed Tesla's half of the fine he wasn't allowed to pay by buying that much more Tesla stock. Had the SEC not fined him he likely wouldn't be the worlds wealthiest person right now. Elon Musk laughs in the SEC's face.
    Reply
  • PapaCrazy
    Endymio said:
    An impressive wall of words, but it's clear you have no significant market presence or knowledge. The GameStop fiasco is not relevant to this situation, nor did "Roaring Kitty" expose any corruption, because there was none to expose.

    I had intended further remarks, but I've just reached the point in your post where you claim the FBI and CIA are being rented out by the Fed, itself secretly owned by England. I know when a mind is beyond help. Enjoy your belief system.

    He did make one important point in that wall though... the stock market is nothing but a monetary evaluation of confidence. It can be arbitrary, psychological, and sometimes verging on the illusionary. Hence the reason for laws against stock promotion. There are many examples of people manipulating confidence. Some argue, quite reasonably, that if a fool gets burned playing a fool's game it is their own fault. Yet our society often promotes the market as safe and rational. Some game rules need to be set and monitored to keep it anywhere close to fair. Or, if not fair, atleast accurately represented.
    Reply
  • Endymio
    PapaCrazy said:
    He did make one important point in that wall though... the stock market is nothing but a monetary evaluation of confidence.
    Only in the short term. In the long run, all companies are valued by their return on investment. Companies that increase profits, rise in value.

    If you don't like confidence-based valuations, simply use the old trusted and true buy and hold strategy. Only suckers trying get-rich-quick schemes get burned.

    ...Hence the reason for laws against stock promotion.
    There are no laws against stock promotion. There are laws against fraudulently promoting stocks: a vast difference.
    Reply