Just one tweet, that’s all it took.
Bitcoin investors who have been waiting for Tesla Chief Executive Elon Musk to swoop in and rescue the cryptocurrency from a weekslong rut may have just gotten their wish. For now, at least.
The price of Bitcoin climbed to $39,335 on Monday, a gain of 12% in 24 hours after Musk responded on Twitter to a CoinTelegraph report in which he was accused of “Bitcoin pump and dump.”
“This is inaccurate. Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market. When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions,” he said, in response.
In the article, Magda Wierzycka, the chief executive officer of South African financial services group Sygnia, opined that recent Bitcoin volatility was “an unexpected function of what I would call market manipulation by Elon Musk. If that happens to a listed company, he would be investigated and severely sanctioned by [the] SEC [Securities and Exchange Commission].”
But investors appeared to focus more on what Musk had to say about resuming crypto purchases for his electric cars. His tweet in May, that Tesla wouldn’t accept Bitcoin for vehicle purchases anymore because of environmental reasons, was blamed for triggering a selloff in cryptocurrencies.
Bitcoin remains roughly 45% below an all-time high of $64,829.14 reached in mid-April.
According to a University of Cambridge index, Bitcoin currently consumes about 97 terawatts per hour, which exceeds the power usage of entire countries such as Kazakhstan and isn’t far off what is used by the Netherlands.
At the time of Musk’s tweet in May, though, some analysts suggested he was likely trying to boost Tesla’s green credentials and promote sustainable energy to fuel Bitcoin production, something that would benefit the company over the long term.
Jeffrey Halley, senior market analyst at Oanda, said he wasn’t quite sure how Musk would collect the data to ascertain that Bitcoin miners were using more renewable energy.
But in any case, the weekend rally for Bitcoin has invalidated a bearish symmetrical triangle—a bearish chart pattern—that he had been keeping an eye on last week. “The chart suggest consolidation followed by a rally through $41,000.00 targets further gains to around $44,000.00,” he said in a note to clients.
“This latest tweet only confirms what a crazy relationship Musk has with Bitcoin and his incredible influence on prices,” said Neil Wilson, chief market analyst for Markets.com, in a note to clients.