Bitcoin Dancing To Elon Musk Tune
Bitcoin jumped above $39,000 after Elon Musk said Tesla Inc. would resume transactions with the cryptocurrency when mining is done with more clean energy.
The electric-car maker will allow Bitcoin transactions again “when there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend,” Musk, Tesla’s chief executive officer, said in a tweet.
His posting was in reply to a report in Cointelegraph, which cited Magda Wierzycka, executive chair of South African asset manager Sygnia, as saying Musk’s recent tweets on Bitcoin should have prompted an investigation by the U.S. Securities and Exchange Commission.
The cryptocurrency gained as much as 9.3% to $39,372 on Sunday afternoon in New York, the highest level since June 3 and just below the $40,000 round-number level seen as key by some chart watchers. It was down about 1% to $38,881 as of 7 a.m. in Hong Kong on Monday.
“The tweet added to positive momentum as Elon’s stance seems to be moderating and providing a target that’s not far away,” said Jonathan Cheesman, head of over-the-counter and institutional sales at crypto derivatives exchange FTX.
“The rally was already underway as the market speculates about an imminent purchase from MicroStrategy and the G-7 comments on crypto were neutral, even optimistic, about digital innovation.”
MicroStrategy Inc., whose chief executive officer Michael Saylor has become a vocal Bitcoin evangelist, last week boosted a junk-bond offering for the purposes of buying the cryptocurrency to $500 million from $400 million.
Musk has whipsawed Bitcoin and other digital tokens in the past few months. In February, Tesla announced it had bought $1.5 billion in Bitcoin and signaled its intent to start accepting Bitcoin as payment for vehicles.
In March, Musk tweeted, “you can now buy a Tesla with Bitcoin,” only to say in May that the practice was suspended due to concerns about fossil-fuel usage for Bitcoin mining and transactions.
The U-turn has been controversial, as Wierzycka’s reported comments indicate, partially because the moves by Tesla and Musk have had noticeable effects on Bitcoin’s price.
While there are other issues out there, ranging from institutional adoption and diversification on the positive side to sustainability and regulatory concerns on the negative, a Musk tweet can often change momentum and can dominate the narrative for days or weeks.