Business Today

Exclusive: Elon Musk has a responsibility and should not tweet to manipulate crypto market, says CoinDCX CEO

Tesla chief and cryptocurrency enthusiast Elon Musk has a responsibility and should not put out social media posts that can have a direct impact on prices, Sumit Gupta CEO and co-founder, CoinDCX GO, told India Today Tech in an exclusive conversation.

twitter-logoManas Tiwari | June 11, 2021 | Updated 16:19 IST
Elon Musk and Bitcoin
Musk has been an influential figure behind the rise of cryptocurrencies like Bitcoin.


  • Elon Musk has been an influential figure behind cryptocurrency.
  • Both rupee and Bitcoin will co-exist in coming years.
  • The government needs to bring regulations to safeguard customers.

Tesla chief and cryptocurrency enthusiast Elon Musk has a responsibility and should not put out social media posts that can have a direct impact on prices, Sumit Gupta CEO and co-founder, CoinDCX GO, told India Today Tech in an exclusive conversation. Musk has been an influential figure behind the rise of cryptocurrencies like Bitcoin and Dogecoin, but his tweets have often had a negative impact on the market as well.

"People like Elon Musk have a responsibility, and they should ideally not put out tweets which manipulate the market. That's the responsible thing to do. Even if you are able to convince one person, you won't be able to do that with the whole world," Sumit said.

Musk's tweets have also pumped Dogecoin in the past and brought it to prominence. He has often used memes and pop-culture references to talk about crypto on Twitter eventually impacting the prices. The market reaction is more because the crypto industry is still very young.

"When an industry is young, a lot of people want to be a part of it and that involves bad actors too. It happens not just with crypto but every industry. Right now the crypto market is very volatile but as the market cap grows you will see lesser impact of these tweets on it," Sumit said.

Sumit believes that it is a temporary thing eventually people will stop giving value to Elon Musk's tweets.

Will Bitcoin replace rupee?

The crypto enthusiasts have always maintained that Bitcoin is the future and at some point, will replace the form of currency we have right now. El Salvador turned this into a reality earlier this week when it decided to make Bitcoin a legal tender. Of course, it was easy because El Salvador doesn't have its own currency and uses the US dollar as the official currency.

Sumit believes that it will be very difficult to replace fiat currency. Instead, rupee and Bitcoin will co-exist in the years to come.

Bitcoin will not completely replace fiat currency completely. It will create a parallel economy of its own. Countries like El Salvador and others may open to it because they see this as an opportunity to become a financial powerhouse," he said.

However, the smaller world economies will be more open to cryptocurrencies as they may bring more financial opportunities.

Watch full interview here -

The countries that adopt cryptocurrency before others will attract more crypto talent. There is a belief that crypto mining countries will also be interested in investing in nations that have friendly policies. El Salvador is an example of the same. It has announced that anyone who invests more than three Bitcoins in country's economy will get its citizenship

"Legal tender is just one of the many steps. We will also have to keep the transaction fee in mind. The current transaction fee is not feasible for day-to-day transactions. Yes, it can still be used for large transactions. Today, if you buy a burger using Bitcoin, you will end up paying a lot more in transaction fee than the actual cost of the burger," Sumit explained.

Where do cryptocurrencies get their value from?

Not matter how much we talk about cryptocurrencies, the fact remains that they can't be used to purchase anything in the real market. But, that doesn't mean that crypto coiuns don't too many uses cases right now.

Sumit explained that only a small percentage of holders use Gold in the physical form. He said that almost 95 per cent of world's Gold is stored in Bullion by the governments and banks. It gets its value from the network of people which believe that it has a certain value. Something similar is happening with Bitcoin.

Sumit said that as the market cap of Bitcoin increases, it will emerge as a bigger store of value in the long run.

How not to burn your hands?

The investors should understand that crypto market is still young and while there are a lot of videos and articles on the internet about how it can help you make quick money, there is also a massive risk involved. The idea should be to put only a very small part of your investment portfolio in cryptocurrencies.

"No one should put more money in crypto than what they can afford to lose. I do not recommend anyone to take a loan and invest in crypto. If you have a total investment portfolio of Rs 100, it is okay to invest a small part of it in crypto as a diversification tool."

For example, if 5 per cent of your investments are directed towards crypto, the risk is capped at 5 per cent too, but the returns can be substantially higher. Once you have decided on the percentage, the next thing is to finalise the coins you want to buy.

Bitcoin, Ethereum and Ripple are only few cryptocurrencies people are aware of. You open any crypto trading platform, and you will see a long list of coins and many others are being created real time. It becomes important to know and understand these coins before putting their money in them. The onus is on the investors to do some research and check a coin's history before buying it.

"The investors should definitely target projects that have long term potential, have a good history, large network effect and big community. Do not buy a coin because it is really cheap right now. Do think you can buy 1 lakh coins for just $1. Opt for a cryptocurrency on the basis of its market cap," Sumit said.

The investors should start with a small amount. They can buy Bitcoin for as small as Rs 10 and expand their portfolio with time.

Are investors and their money safe?

One of India's leading investment platforms recently shut down its regular mutual funds operations. There was some panic among investors before it clarified that units can still be redeemed from the AMC websites directly. Similar concerns remain over crypto investments. What if an exchange platform shuts down one day? Will your money still be safe?

Sumit believes that government needs to come up with proper regulations to ensure that.

"Once regulations are there, it will not be easy to do that. You will have deposits with the government, will have to take license and only serious players will be able to survive. Government should also lay out guidelines about who are the players that can operate."

For now, the crypto industry in India is self-regulated but that leaves scope for a lot of malpractices. The investors need to figure out for how long an investment platform has been around and should trust it only after that.

  • Print
A    A   A