Bitcoin Rebounds Above $40,000 As Elon Musk Continues to Wield His Power Over Cryptocurrency Market

Bitcoin Rebounds Above $40,000 As Elon Musk Continues to Wield His Power Over Cryptocurrency Market

Tesla founder and CEO Elon Musk continues to exert enormous influence on the cryptocurrency market. Musk, who has been an ardent fan of the leading cryptocurrency, bitcoin, announced his abrupt parting with the much touted digital coin in April, citing the use of carbon-energy in mining. Bitcoin plunged more than half from $64,000, its highest price so far.

Bitcoin has been reeling from the effects of Musk’s tweets, swinging below $40,000 since then. Now with another tweet, Musk has sent the coin up, setting it up for maybe, a total rebound.

On Sunday, Musk fended off criticism over his market influence and said Tesla sold bitcoin but may resume transactions using it.

Bitcoin has gyrated to Musk’s views for months since Tesla announced a $1.5 billion bitcoin purchase in February and said it would take the cryptocurrency in payment.

“When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions,” Musk said on Twitter on Sunday.

Bitcoin, which jumped nearly 10% on Sunday, breaking above its 20-day moving average, was up 4.3% on Monday at 40,692.27, its first foray above $40,000 in more than two weeks.

“Musk’s words caused bitcoin to surge,” said Simon Peters, market analyst at eToro.

Bitcoin was also supported Monday after billionaire hedge fund manager Paul Tudor Jones told CNBC on Monday that bitcoin is a great way to protect his wealth over the long run and is part of his portfolio just like gold.

Bitcoin prices were also helped by software company and major bitcoin-backer MicroStrategy raising half a billion dollars to buy bitcoin, said Bobby Ong, co-founder of crypto analytics website CoinGecko.

Musk’s tweet was made in response to an article based on remarks from Magda Wierzycka, head of cybersecurity firm Syngia, who in a radio interview last week accused him of “price manipulation” and selling a “big part” of his exposure.

“This is inaccurate,” Musk said. “Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market.”

Musk had tweeted in May that Tesla “will not be selling any bitcoin” and “has not sold any bitcoin” but investors are keenly awaiting Tesla’s next earnings update – due next month – for any disclosure of changes to its position.

Musk has taken issue with the vast computing power required to process bitcoin transactions and in early June posted messages appearing to lament a breakup with bitcoin.

However, his influence in the cryptocurrency is yet to be contained, and investors are finding it hard to reckon with. In early June, the hacker group, Anonymous had threatened the billionaire in a video they shared on Twitter, for manipulating the cryptocurrency market.

Billionaire entrepreneur Elon Musk has “destroyed lives” through his tweets about cryptocurrency, hacker collective Anonymous has said in a video threatening the Tesla founder.

In the video posted on Saturday, the group said Musk was “another narcissistic rich dude who is desperate for attention”, but that his tweets on cryptocurrency were damaging to investors.

“Millions of retail investors were really counting on their crypto gains to improve their lives,” a figure in a Guy Fawkes style mask says in the video.

“Of course, they took the risk upon themselves when they invested, and everyone knows to be prepared for volatility in crypto, but your tweets this week show a clear disregard for the average working person.”

The group said retail investors had been hoping their cryptocurrency gains would improve their gains, and that Musk needed to stop his “temper tantrums”.

“You may think you are the smartest person in the room, but now you have met your match,” the nearly four-minute long video concluded.

“We are Anonymous! We are Legion! Expect us.”

Musk’s tweet on Sunday, which helped buoy bitcoin to more than $40,000 is an indication that he still wields a strong grip on the cryptocurrency market. Investors are hoping that he doesn’t tweet something negative soon that will ruin the little gain of the week.

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