THE price of the dog meme cryptocurrency Shiba Inu has plummeted by 20% after Elon Musk announced he doesn't own any coins.
The cryptocurrency plummeted from $0.00004391 to $0.00003472 in just a matter of hours yesterday following the billionaire's revelation.
Shibu Inu is a cryptocurrency token that allows users to hold trillions of them.
Tokens of Shiba Inu feature the same dog as Dogecoin, which has become one of the most popular cryptocurrencies this year.
It soared in value earlier this month following another tweet by Mr Musk, who has a Shiba Inu puppy and posted a picture of it on the social media site, which started a big rally.
Millions of people looking to invest in cryptocurrency often look to Mr Musk for advice, meaning the Tesla-founder can either propel or drop the price of coins just by one tweet.
But since his latest tweet about the coin, Shiba Inu's value has rapidly decline.
One Twitter user under the name @ShibaInuHolder tweeted at Mr Musk asking how many Shiba Inu tokens he was holding, to which the billionaire replied: "none".
Both tweets were liked and retweeted by tens of thousands of people, and following the exchange, the price of the coin dropped over 20% in three hours.
It shows how volatile investing in cryptocurrency is, as the price of any coin can go up as well as down in the blink of an eye.
There are also big risks involved if you choose to invest.
You could even lose all your cash and because they are not regulated, you won't have anyone to complain to if things go wrong.
You should only ever invest money you can afford to lose and in financial products that you understand.
Newer coins, like Shiba Inu, are even riskier than more established tokens like bitcoin and ethereum.
Since Mr Musk's tweet, Shiba Inu has recovered since its low of $0.00003472 and is currently trading at $0.00003922 – an increase of 13%.
But it's value is still below what is was before Mr Musk published his tweet.
It's not the first time Shiba Inu has crashed overnight.
The coin – along with other tokens – spiralled in summer this year after China announced a series of tough crackdowns on the cryptocurrency market.
The market also dipped after the UK's financial watchdog banned one of the largest cryptocurrency exchanges, Binance, in May.
What are the risks of investing in crypto?
Investing in any cryptocurrency is risky – here we round up what you need to know.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
We pay for your stories!
Do you have a story for The Sun Money team?
Email us at [email protected]
Source: Read Full Article