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Bitcoin price tops US$40,000 after Musk says Tesla could use it again

CHINA - 2021/05/20: In this photo illustration a Bitcoin is seen on display with a Bitcoin price trend chart in the background. Photo Illustration by Sheldon Cooper/SOPA Images/LightRocket via Getty Images

Bitcoin climbed above US$40,000 on Monday, after yet another weekend of price swings following tweets from Tesla boss Elon Musk, who 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 US$1.5 billion bitcoin purchase in February and said it would take the cryptocurrency in payment. He later said the electric car maker 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, which jumped nearly 10 per cent on Sunday, breaking above its 20-day moving average, was up 4.3 per cent on Monday at 40,692.27, its first foray above US$40,000 in more than two weeks.

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Read more: Tesla to use Bitcoin again only if it’s mined using clean energy, Elon Musk says

“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.

Bitcoin is up about 40 per cent this year but has collapsed from a record peak above US$60,000 amid a regulatory crackdown in China and Musk’s apparently wavering enthusiasm for it. Tesla stock is down about 30 per cent since the company’s bitcoin purchase.

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.

 

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

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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.

(Reporting by Tom Westbrook in Singapore, Tom Wilson in London, and Saqib Iqbal Ahmed in New York; editing by Chizu Nomiyama and Jason Neely)

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