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Saturday, Jul 31, 2021

Bitcoin rebounds after Elon Musk confirms Tesla may accept it again

Bitcoin rebounds after Elon Musk confirms Tesla may accept it again

Accused again of market manipulation, Bitcoin bounced nearly 10 per cent in value after Elon Musk tweeted Tesla could once again accept it as payment.

Bitcoin hit a two-week peak just shy of $40,000 (€33,000) on Monday, after another weekend reacting to more tweets from Tesla boss Elon Musk.

The founder of the electric automaker 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 (€1.2 billion) Bitcoin purchase in February and said it would take the cryptocurrency in payment.

He later said the company would not accept Bitcoin due to concerns over how mining the currency requires high energy use and contributes to climate change.

"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 rallied more than 9 per cent after that message, breaking above its 20-day moving average, and it climbed a tiny bit further in Asia to hit $39,838.92 (€32889,22).


"The market had been going through another round of correction over the weekend ... until Elon Musk's tweet of accepting BTC again for Tesla purchases changed sentiment," said Bobby Ong, co-founder of crypto analytics website CoinGecko.

He said the market was also supported by software company and major Bitcoin-backer MicroStrategy raising $500 million (€413 million) to buy Bitcoin.

Bitcoin is up about 33 per cent this year but has collapsed from a record peak above $60,000 (€49,500) amid a regulatory crackdown in China and Musk's apparently wavering enthusiasm for it. Telsa stock is down about 30 per cent since the company's bitcoin purchase.

Elon Musk defends himself


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.

Other cryptocurrencies were steady after weekend gains, with Ether at $2,491 (€2,056) and one-time Musk darling Dogecoin buying about $0.32 (€0.26) on crypto exchange Binance.

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