Collapse of the cryptocurrency circle: V God slaughters animals, Musk stops accepting Bitcoin

This article is from Rhythm BlockBeats.

When you opened this article, you probably didn't expect that the magical zoo coin craze would end in this way, nor did you expect that BTC would plummet 10% due to a single statement. The early morning of May 13, Beijing time, will surely become the most heartwarming yet dramatic sleepless night of this round of the cryptocurrency market bull run.

In the early hours of May 13, Ethereum founder Vitalik Buterin (known as V God) allocated the Shiba Inu coin (SHIB) he received from an airdrop in his wallet to several charitable foundations. After the foundations sold off in bulk, they raised billions of dollars to donate to India, which is currently suffering severely from the pandemic. The sale of half of the total circulating supply of SHIB in a short period caused a crash effect, instantly trapping new retail investors who were happily playing with animal coins just a few days ago, many of whom didn't even know who V God was. The price of SHIB halved in a very short time, plummeting by 50%.

However, shortly after V God completed his charitable actions, something even more shocking happened in the cryptocurrency community: Tesla founder Elon Musk announced that Tesla would withdraw support for Bitcoin payments, and the previously enabled Bitcoin purchasing option would be canceled. This news once again hit the cryptocurrency market hard, causing Bitcoin to drop 10%, with the entire market evaporating by $230 billion.

Musk and V God are the absolute core of the current global cryptocurrency market and are both key opinion leaders (KOLs). The simultaneous statements from these two KOLs early this morning triggered market fluctuations, marking their significant influence. They can take everyone to new heights, but they can also cause retail investors to crash without warning.

The Charitable Crash by Ethereum's Founder

In the early hours of May 13, according to FTX market data, the price of SHIB, which had previously surged several times, began to plummet rapidly. Meanwhile, on-chain data for SHIB also showed unusual activity, with the wallet address marked as belonging to Ethereum founder V God withdrawing SHIB/WETH liquidity from Uniswap and starting to sell SHIB half an hour later.

It is important to note that V God’s wallet held 50% of the circulating supply of SHIB, which was directly airdropped to him. During the days when SHIB was skyrocketing, the value of SHIB in V God’s wallet peaked at nearly $200 billion.

At 1:49 AM, V God began his first sale of SHIB, selling 22 billion SHIB for $420,000 worth of WETH.

In addition to selling SHIB, V God also sold HUSKY (Husky), Dogelon (ELON), and AKITA (Akita).

FTX market data shows that since V God began selling, the price of SHIB has dropped by about 38%, but it still has a market cap of about $19 billion. However, compared to its peak, SHIB's market cap has decreased by 60%.

Market sentiment was shattered, and the animals in the zoo coins were "slaughtered." Public opinion was rife, with people discussing on social media, "V God doesn't like cat and dog meme coins," "V God hates worthless things and speculation"…

The prices of these "animal coins" also plummeted, with SHIB dropping to a low of $0.0000153. As of the time of writing, AKITA is quoted at $0.00000895, with a 24-hour decline of over 30%. The drop for Dogelon Mars was even more dramatic, with a decline of over 70%, and a single ELON priced at just $0.00000061.

Investors were clearly stunned.

Some young retail investors who entered the market this year were asking, "Who is this V God? Why does he have half of the SHIB? Is he a big player? Why is everyone talking about him?"

Hours later, the truth behind the slaughter of the zoo was revealed.

The funds obtained from V God’s sale of SHIB would be donated to the COVID relief fund in India.

On-chain data shows that V God, who previously held 50% of the total SHIB supply, conducted a total of 8 SHIB token transfers in the early morning, with the last transfer being the largest, valued at about $1 billion. The recipient of this transfer was the COVID relief fund in India. As of the time of writing, the Indian COVID relief fund has not sold any SHIB.

At the same time, V God also donated all the "animal coins" in his cryptocurrency wallet, such as SHIB, AKITA, and ELON, as well as some Ether (ETH), to various charitable or non-profit organizations.

According to incomplete statistics, V God donated 506 trillion SHIB tokens (worth over $1 billion) and 500 Ether (ETH) to the COVID relief fund recently launched by Polygon founder Sandeep Nailwal, and donated AKITA tokens worth $440 million (approximately 49 trillion tokens) to the Ethereum open-source platform Gitcoin.

The Methuselah Foundation, a medical charity dedicated to extending human life, received a donation of 43 billion ELON tokens (worth about $215,000) and 1,000 Ether (ETH) from V God. The Machine Intelligence Research Institute, focused on ensuring AI has a positive impact, received 1,050 Ether (ETH), and another charity, GiveWell, also received a donation of $53 million worth of Ether (ETH) from V God.

Sandeep, the head of the charitable foundation that received V God’s substantial donations, tweeted, "Thank you to V God Buterin for the donation. We have learned the importance of community from Ethereum and V God Buterin, so we will not do anything that harms the community, especially the SHIB community closely related to this incident. We will act responsibly and cautiously. Please rest assured, SHIB holders."

After V God’s charitable actions were exposed, a huge uproar erupted on social media. At this time, a tweet from Tesla founder and retail investor guru Elon Musk threw the entire cryptocurrency market into chaos.

Musk Announces Tesla Stops Accepting Bitcoin Payments

This morning, Elon Musk announced that due to the significant carbon emissions caused by Bitcoin mining from the consumption of coal and other mineral energy sources, Tesla would stop accepting Bitcoin payments. Although he assured everyone that Tesla would not sell Bitcoin to crash the market, this statement caused the cryptocurrency market to shake, with Bitcoin's price plummeting by $5,000.

Of course, this is not the first time Elon Musk has influenced the entire cryptocurrency market with a single tweet.

Looking back at the media coverage of Elon Musk in the cryptocurrency space in 2021, his every move has a butterfly effect on cryptocurrency prices: changing his Twitter bio, announcing that Tesla would accept cryptocurrency payments caused Bitcoin to surge; every time he mentions Dogecoin in tweets, interviews, or TV shows, Dogecoin experiences wild fluctuations; and this time, announcing Tesla's cessation of Bitcoin payments led to a significant drop in Bitcoin's price.

Mixed Reviews

Many investors, especially seasoned ones in the community, likely woke up with smiles on their faces when they saw V God’s actions.

For these zoo coins that can fluctuate dozens or even hundreds of times overnight, which have made many people feel like they hit the lottery but are ultimately worthless MEME coins, seasoned investors are already dissatisfied, their belief in value investing shattered.

In their eyes, the cryptocurrency industry is no longer a game of beating drums and passing the word; it involves decentralized finance, crypto art, and many new ideas worth discussing, rather than these comical animal names.

While the zoo coin craze was happening, Uniswap, the absolute leader in decentralized finance, also launched its latest version, adding a brand new market-making experience. But clearly, even the leading player was overshadowed by the animal coins.

Those new users who should have been attracted to Uniswap were drawn away by the traffic of animal coins, participating in investments, making a fortune overnight, and then losing it all the next night. They might think this is what the crypto space is about—it's all about the thrill.

But the crypto space is no longer like that. "V God is bringing the cryptocurrency industry back to its roots," some commented.

From another perspective, charity might be the optimal choice V God could find.

Projects like SHIB chose to send 50% of their circulating supply to V God’s address with the aim of having him endorse them. They bet that V God, who is already financially free, would not sell these coins. If V God holds, this 50% of the circulating supply is effectively destroyed, which is beneficial for SHIB. If V God sells, he would face criticism from the entire cryptocurrency community, indirectly promoting SHIB.

The COVID situation in India is becoming increasingly severe, with daily confirmed cases reaching hundreds of thousands, causing global concern. This is not just a problem for one country but a disaster that the whole world needs to pay attention to.

V God’s choice of charity seems to be the only optimal solution.

Even SHIB officially recognized V God’s choice, stating on their official Twitter, "V God’s donation makes SHIB more than just a MEME coin; it has a deeper significance for humanity."

But what about those SHIB investors?

From the perspective of the SHIB community, V God has become a villain in their eyes.

They believe that the $1.2 billion value of SHIB in V God’s wallet was supported by their community, with no credit to V God.

In other words, in their eyes, V God is not donating his own money, but their money. The new retail investors who are suffering do not know V God; insiders refer to him as "the founder of the world's strongest public chain, Ethereum," but in the eyes of new retail investors, he is "a villain without community consensus."

Musk has also sparked considerable community discussion. Some say he doesn't care about cryptocurrency or environmental issues; he just enjoys the feeling of "being responded to."

The environmental issues brought by Bitcoin have indeed received much attention recently. For example, Microsoft co-founder Bill Gates has previously stated that Bitcoin pollutes the environment.

However, Bitcoin has already begun exploring clean energy. Noted crypto researcher and top crypto VC Nic Carter recently addressed misconceptions about Bitcoin's excessive energy consumption and increased carbon emissions in an article titled "How Much Energy Does Bitcoin Actually Consume?"

Nic Carter pointed out that research by CCAF (Cambridge Centre for Alternative Finance) shows that in 2019, 73% of Bitcoin mining was using renewable energy. Although this figure dropped to 39% in September 2020, it is still more than twice the amount of renewable energy used by the U.S. power grid.

At the same time, Bitcoin mining is also utilizing some previously unused resources. A typical example is hydropower in Sichuan and Yunnan, where hydropower generation capacity far exceeds the local energy needs. Bitcoin mining turns this surplus energy into value. Bitcoin is no longer just a toy that emits carbon dioxide without creating any value.

Reflection on the Magical Industry

The fervent zoo coin craze has temporarily come to a halt, and all industry investors who have experienced this brief "zoo bull and bear" cycle need to reflect.

First, reflect on whether they underestimated the risks of the crypto market. Countless "new retail investors" saw the explosive rise of animal MEME coins and were driven by the intense wealth effect to join the bubble speculation. They are "new," so they do not know what DYOR (Do Your Own Research) means and only rush in one after another, FOMOing.

Second, reflect on why people can be easily manipulated by MEME coins and FOMO into countless worthless tokens. When a celebrity with millions of followers recklessly promotes a worthless token on Twitter, why are there so few who question it, and why do they all choose to blindly follow? This is not a replay of the myth of retail investors defeating Wall Street; it is merely a farce, and you and I are just the clowns.

Third, reflect on what exactly you are investing in when you make an investment. Whether buying funds, stocks, or cryptocurrencies, they are all forms of investment. So when we buy SHIB, what exactly are we investing for? Is it because Musk is promoting Dogecoin, and SHIB's logo is also a dog? Is it because Musk mentioned the word SHIB on Twitter? Or do you genuinely see some value in SHIB and believe it is not a bubble?

When investment is driven by jokes, "investment" becomes "speculation." We often say that we live in a very restless era, where people prefer to read fantasy novels, watch movies, or even just watch TikTok clips. In an era where many are giving negative reviews to "The Lord of the Rings" for its slow plot pacing, how can we expect people to take the time to study a "Dogecoin"?

When market sentiment is clearly overheated, what we need to do is remain calm.

We cannot stop the words of influencers with millions of followers, but we hope we do not become pawns swept along by them. Redirecting the enthusiasm for speculative bubbles into investing in truly valuable projects, allowing more valuable projects to gain exposure, attention, and better development, is the mission that each of us investors must shoulder in this era.