Mega-Bullish News For Bitcoin As Elon Musk Says, “Pay Me In Bitcoin” And Biden Says, “Ignore Budget Deficits”!
Elon Musk, The World’s Richest Man, Wants To Be Paid In Bitcoin. Mega-Bullish News For Bitcoin As Elon Musk Says, “Pay Me In Bitcoin” And Biden Says, “Ignore Budget Deficits”!
Elon Musk Adds Bitcoin To Twitter Bio With 43.7M Followers
Some of Musk’s 43 million followers might have noticed, after Bitcoin rallied nearly 14% in the 30 minutes following his bio update.
When the richest man in the world Elon Musk updated his Twitter bio on Jan. 29 — simply adding the word ‘Bitcoin’ — it was followed by a near-immediate 13% increase to the Bitcoin (BTC) spot price.
Musk’s bio appeared to be updated on Friday morning, and was followed by a cryptic tweet that referred to the inevitability of… something.
In retrospect, it was inevitable
— Elon Musk (@elonmusk) January 29, 2021
Tweeted at 8:22 a.m. UTC, Musk’s 43 million followers apparently took notice. Some assumed the tweet was a reference to the Dogecoin (DOGE) price surge which was ignited by r/wallstreetbet traders as a follow-up to the recent Gamestop (GME) stock short-squeeze. Others assumed the tweet was related to Bitcoin.
Either way, at 8:24 a.m., Bitcoin suddenly took off. Over the course of the next 30 minutes, the value of Bitcoin increased by 13.9%, as the coin price climbed from a starting point of $32,194. By 9:04 a.m., the coin was worth $36,670, according to data from CoinMarketCap. Shortly afterward, BTC continued to climb, eventually hitting $37,420 — representing more than 20% growth in the previous 24 hours.
In December 2020, the value of Dogecoin increased by 25% after Musk posted a Doge meme. Musk had previously posted Dogecoin memes followed by the words “It’s inevitable,” perhaps providing a clue to the nature of Friday’s tweet.
Musk isn’t even the first billionaire to add the word Bitcoin to his Twitter bio. The social media site’s own CEO, Jack Dorsey, did the same thing in mid-2020. Dorsey is the CEO of Square, the fintech company responsible for the Cash App, which also caters to Bitcoin users. Almost 80% of Cash App’s revenue came from Bitcoin alone by the third quarter of last year.
Speculative Frenzy Spills Into Crypto As Bitcoin Tops $38,000
The speculative frenzy that’s gripped a host of left-for-dead retail stocks spilled into the crytpo world Friday, with Bitcoin surging as much as 16%.
The digital token rallied overnight after Elon Musk tweeted “#bitcoin” to his legions of followers and day traders were restricted from transacting some of their favorite stocks. It had plunged from a record earlier this month as day traders sought fatter returns in stocks like GameStop Corp. that caught the attention of members in Reddit’s WallStreetBets forum.
The cryptocurrency is no stranger to bouts of speculative mania. It closed 2020 on a 200% tear over three months as the Wall Street establishment showed increased interest in it. But that move paled next to the returns notched by the WSB crowd, where day traders targeted heavily shorted stocks and used options to spark gains that top 900% in some cases.
On Thursday, that furor attracted the attention of Washington and regulators, leading online brokerages to restrict trading in certain stocks and options.
Robinhood Markets, the brokerage that ushered in the no-fee trading structure that enlivened the retail scene, requires increased margin to trade some of the most popular stocks and on Friday limited transactions in Bitcoin and other digital tokens that had joined the party. That did little to temper demand for an asset that has long been the darling of the online trading crowd.
“I would imagine that the Venn diagram of people who bought GameStop and people who buy Bitcoin has a significant overlap,” said Craig Erlam, senior market analyst at OANDA Europe. “The kind of rationale to some extent behind what we’ve seen this week kind of links this taking on the institutions, taking on the establishment.”
Musk’s page on Twitter simply said #bitcoin with no further explanation, but speculation that the world’s richest man might be a Bitcoin investor was enough to set off the dramatic rally. Prices spiked in a matter of minutes, for the biggest intraday move in almost a year.
“This huge melt-up is due to Elon’s tweet,” said Antoni Trenchev, managing partner and co-founder of Nexo in London, which bills itself as the world’s biggest crypto lender. Musk’s support for Bitcoin “creates a safe zone for some of the smaller companies and possibly everyone in the S&P 500 to allocate into Bitcoin,” he said.
Musk also tweeted an image of a “Dogue” magazine cover featuring a whippet in a red sweater — a play on the fashion magazine “Vogue.” He also sent posts calling Cyberpunk a great video game and said, “In retrospect, it was inevitable.”
Binance, the world’s largest cryptocurrency exchange by volume, briefly suspended withdrawals on Friday to address a large increase in requests. Chief Executive Officer Changpeng Zhao said that user sign-ups and trades jumped to a record high.
“We almost ran out of DOGE coin addresses,” Zhao told Bloomberg. “Our system couldn’t generate new addresses fast enough to match new users coming in. It’s crazy.”
Coinbase, the largest U.S. digital-asset exchange, said it was investigating delays with deposits and withdrawals.
Traders trying to read between the lines of Musk’s tweets interpreted his cryptic messages as support for Bitcoin and Dogecoin, a digital coin originally created as a joke. Dogecoin prices skyrocked higher on Friday, jumping about 300% in the last 24 hours to $0.04355, according to CoinMarketCap data.
It’s not the first time Musk has hinted at crypto assets. Earlier this month, he agreed with a post referencing being paid in Bitcoin, and when someone asked if he owned any Dogecoin, he replied, “No, but maybe one day.”
Cryptocurrency stocks also surged. Marathon Patent Group Inc. and Bit Digital Inc. were up at least 9%.
Bitcoin Price Returns To Troubled Waters Hours After Elon Musk’s BTC Tweet
Bitcoin’s current volatility reflects traders’ excitement as the price bounces between key support and resistance levels.
When Bitcoin’s (BTC) price dropped 10% to $29,150 on Jan. 27, something unusual happened with the Chicago Mercantile Exchange (CME) BTC futures contracts.
As the price fell, these CME Bitcoin futures traded at a 1% discount to Coinbase, which signaled a disarrangement between both markets.
Bitcoin spot has almost full retraced the weekly.
CME bitcoin futs are both backwardian and expire Friday. That is all.
— i.am.nomad (@IamNomad) January 27, 2021
Immediately, traders suggested that futures contracts, which were set to expire in 48-hours, were responsible for the price dump. Now, before rushing to quick conclusions, one should note that every short sale needs a buyer (long) of the same size.
Thus, there can not be an open interest imbalance. Moreover, futures contracts can be extended (rolled over) for a future date, as long as its holder has enough margin to cover it.
Instead of assuming that one singular factor impacted Bitcoin’s price, it’s better to analyze the intraday movements of both markets (CME futures and spot exchanges).
The futures premium (or basis) measures the premium of longer-term futures contracts to the current spot (regular markets) levels. Whenever this indicator fades or turns negative, this is an alarming red flag. This situation is also known as backwardation and indicates bearish sentiment.
These fixed-month contracts usually trade at a slight premium, indicating that sellers request more money to withhold settlement longer. On healthy markets, futures should trade at a 5% to 15% annualized premium, otherwise known as contango.
The unalignment between each market could have been caused by long contracts liquidations driven by traders with insufficient margin, thin order books, or an intense price action ahead of the remaining spot markets.
Therefore, this data by itself does not uncover a cause or a consequence. Furthermore, a similar movement took place on Jan. 18.
Take notice of how the CME BTC premium collapsed to a negative 1% despite no apparent volatility taking place on the BTC spot exchanges. It is safe to say that this event held zero relation to the market’s price action.
By analyzing the Jan. 27 crash on a more granular view, it is possible to determine whether the negative CME premium preceded the market volatility.
The above data levels show that instead of acting as a leading indicator, the CME Bitcoin futures premium plunged much later in the day. As Bitcoin tested the $31,800 resistance, the sell pressure at CME continued, causing the momentarily price difference.
Multiple reasons could be behind this effect, so comparing the intraday price on multiple exchanges might explain if CME led the downturn.
To summarize, there is no evidence of any price anticipation by the CME Bitcoin futures. These markets are incredibly arbitrated and will typically move in tandem. Moreover, the usual premium might face some momentary discrepancies similar to those that occurred on Jan. 18, regardless of Bitcoin’s volatility at the time.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Wake-up Sunshine! We Gettin’ Ready To Get Even Mo Riatch Biatch! Grab Yo Ass And Hold On!
Elon Musk, the billionaire founder of Tesla and SpaceX and who has just become the world’s richest man, has said he would never turn down being paid in the soaring cryptocurrency bitcoin.
I’ll tell you one thing, I’m never turning down getting paid in bitcoin again.
— Ben Mezrich (@benmezrich) January 8, 2021
Musk, who’s ridden Tesla’s soaring share price to the top of the world’s rich lists over the last year, is known to be a fan of bitcoin, regularly tweeting about it and other cryptocurrencies (though often in a tongue-in-cheek way).
With the bitcoin price reaching never-before-seen highs over the last month, bitcoin and similar digital currencies have returned to the forefront of global consciousness for the first time since bitcoin’s 2017 boom and subsequent bust.
The value of the combined bitcoin and cryptocurrency market has now surged to over $1 trillion. The bitcoin price smashed through $40,000 per bitcoin this week, with the total value of the world’s biggest cryptocurrency passing $750 billion—and pushing bitcoin up the charts of largest global assets.
The bitcoin price, after suffering through a three-year bear market, began to rally in October—breaking into fresh territory last month as a wave of big-name investors named bitcoin as a potential hedge against inflation.
In December, Musk sparked wild speculation his electric car company could add bitcoin to its balance sheet during a public exchange on Twitter.
Musk, responding to the chief executive of MicroStrategy, a business intelligence company that has attracted significant attention in recent months by buying over $1 billion worth of bitcoin, asked whether it was possible to convert billions of Tesla’s dollars to bitcoin.
A week later, Musk, who wants to make a manned mission to Mars a reality in just a few short years, tweeted a future Mars economy could be based on cryptocurrency, such as bitcoin.
Joe Biden Wants To Set Aside Deficit Concerns To Invest In Ailing U.S. Economy
“The president-elect is exactly right that this is not the time for austerity politics,” Sen. Bernie Sanders told NBC News.
President-elect Joe Biden said Friday that he favors setting aside concerns about the federal deficit in order to spend more money to boost the ailing American economy.
“Every major economist thinks we should be investing in deficit spending in order to generate economic growth,” Biden told reporters Friday, citing low interest rates and limited Federal Reserve powers to fix the Covid-19 crisis.
As this city reels from the chaos of a deadly riot at the Capitol spurred by President Donald Trump, Biden said he’ll lay out an economic relief package this year that will cost “in the trillions of dollars.” He said it will include emergency relief for those harmed by the pandemic as well as investments in infrastructure, health care and “a whole range of things that are going to generate good-paying jobs.”
“If we don’t act now things will get much worse and harder to get out of the hole later. So we have to invest now,” Biden said. “There’s a dire, dire need to act now.”
Biden’s remarks came two days after Democrats were projected to capture control of the Senate, giving them the power to set the agenda in both chambers. The comments indicate that he and his party will be less inclined than they were during the Obama administration to acquiesce to Republican demands to limit new spending because of the national debt.
The president-elect suggested he believes the $900 billion pandemic relief package passed by Congress last month would not be enough. His remarks were well-received by progressives who have been skeptical of his moderate and deficit-conscious instincts.
Sen. Bernie Sanders, I-Vt., the runner-up in the 2020 Democratic primary and likely incoming chairman of the Senate Budget Committee, praised Biden’s comments in a Saturday interview.
“The president-elect is exactly right that this is not the time for austerity politics,” Sanders told NBC News. “We cannot maintain the austerity economics that have allowed the very rich to do phenomenally in this country while working people suffer.”
Sanders is poised to oversee the budget reconciliation process, which is not subject to a filibuster. Democrats, who will seize control in the 50-50 Senate with the tie-breaking vote of Vice President-elect Kamala Harris, will be able to approve policies of taxing and spending with a bare majority of votes.
As Biden Preps $3T Stimulus, Bitcoin Could Be Set To Erupt
Biden’s fiscal stimulus plan could send the BTC price rocketing higher.
The incoming Biden administration’s plan to flood the U.S. economy with trillions of dollars could ignite the next leg of the Bitcoin (BTC) bull market, as more investors seek refuge from a crumbling United States dollar.
Axios, an Arlington-based news outlet, reported Thursday that Joe Biden has asked Congress to provide Americans with $2,000 in stimulus payments to help offset the economic devastation of Covid-19. The incoming president has also proposed a $3 trillion tax and infrastructure package as part of his “Build Back Better” program.
Biden doubled down on his call for more direct relief to Americans following Friday’s disappointing jobs report showing a loss of 140,000 positions in December.
“Economic research confirms that with conditions like the crisis today, especially with such low interest rates, taking immediate action – even with deficit financing – is going to help the economy”
If 2020 is anything to go by, the new tidal wave of stimulus could be another catalyst for Bitcoin as more money floods the market and makes its way into asset prices.
Even Donald Trump, a Republican, was no stranger to stimulus. Under his leadership, the United States passed a historic $2 trillion stimulus bill in March. Trump also signed a $900 billion relief package last month that would pave the wave for $600 stimulus checks.
The federal government’s inflation-boosting policies have coincided with record intervention from the Federal Reserve, which deployed trillions of dollars in 2020 to combat a liquidity crisis and keep overnight rates under control.
Although these policies provided a strong backstop for risk-on assets – a category that has included Bitcoin in the past – the emerging narrative surrounding BTC is that it’s a hedge against inflation.
This is not only corroborated by Bitcoin’s historic outperformance over the past 11 years but also by the fresh wave of institutional money entering the market. Institutions are buying Bitcoin with a clear purpose, and may one day become the industry’s “mega HODLers.”
Bitcoin’s digital gold narrative has been one of the biggest catalysts behind the institutional shift towards BTC. This narrative helped fuel Bitcoin’s 300% rally in 2020 and its more than doubling in price over the past three weeks. This trend could intensify in 2021 as the dollar’s purchasing power continues to erode.
Even JPMorgan Chase has acknowledged that Bitcoin is taking market share from gold, the traditional haven asset. On Friday, one Bitcoin was worth more than 22 ounces of gold, which represents a new all-time high.
Bitcoin, Gold Extend Big Losses On Rising Dollar, Yields
Gold fell to extend the biggest drop in two months amid gains in the dollar, Treasury yields, and equities, with investors weighing President-elect Joe Biden’s pledge to detail plans for huge U.S. economic aid.
Bullion endured a switchback week as January got under way, with early gains getting overturned as a surge in Treasury yields damped the appeal of the non-interest bearing asset. That’s come as the dollar recovered from its lowest level in almost three years. The S&P 500 hit another record on Friday.
Gold posted the biggest annual gain in a decade last year as the pandemic ripped through the global economy, and central banks and governments boosted stimulus. With vaccines getting rolled out, traders are weighing up the haven’s prospects for 2021, although further massive support is on the way.
Biden on Friday called for trillions of dollars in immediate further aid, including increased direct payments, after a surge in coronavirus cases caused U.S. payrolls to drop for the first time since April. He will lay out his proposals on Thursday, before taking office on Jan. 20.
Spot gold lost as much as 0.7% to $1,836.30 an ounce, and traded at $1,838.24 at 9:08 a.m. in Singapore. It sank 3.4% on Friday, the most since Nov. 9, and is now on course for a fourth daily fall. Silver declined 2.4%, platinum shed 2.3% and palladium retreated 0.6%. The Bloomberg Dollar Spot Index rose 0.2%.
Meanwhile, in U.S. politics, the House this week will take up a resolution to impeach President Donald Trump for the second time in less than two years over his actions encouraging a mob that stormed the Capitol, Speaker Nancy Pelosi said.
Does A Stronger Dollar Mean Bitcoin Price Is Destined To Lose $30K?
Bitcoin price may see a relief bounce first before retesting the $30,000 support.
Bitcoin price has been accelerating massively in recent months, with Bitcoin (BTC) rallying from $10,000 to $41,500. This rally went vertical without any major corrections in between.
However, every upward cycle has its standard 30% corrections, which can even be considered healthy for more upside.
Bitcoin’s price started to fall south in the past days as it dropped 25% to $30,000. This dropdown was also influenced by the U.S. dollar’s sudden surge, which might be bottomed out in the short term.
Bitcoin Price Flips Bearish On Lower Time Frames
A trend reversal starts with lower time frames flipping bearish, and this chart is an example of such a trend reversal. The $38,900 support was lost after multiple tests.
That’s not bad in itself. But when the support level flips bearish into a resistance, that’s likely to trigger continuation downward.
A similar support/resistance flip occurred at the $36,300 area, after which the price accelerated downward to the support areas at $32,500 and $30,000. Traders and investors should remember that downward corrections almost always occur in a fast and painful move.
However, support seems to be found at $30,000, which can induce some range-bound constructions for now. Such a range-bound construction is healthy for the markets, as strength can be built for the next impulse wave. This impulse wave will most likely occur at a later stage in 2021.
Fibonacci Confluences With The Current Support Levels
The 3-day chart shows confluences on the levels of interest for Bitcoin investors. In general, the previous all-time high at $20,000 would be a tremendous gift to the entire market. However, above this last all-time high, other levels are found and will likely be formidable support.
These levels are aligned with the Fibonacci indicator. The first significant level of support is found in the region between $29,500 and $30,500. This is the level where Bitcoin’s price is currently finding support.
From here, a relief bounce toward $35,000 to $37,000 could occur before another final dip starts.
That final dip could be toward the region around $25,000 to $26,000, as that’s the next Fibonacci level.
Dollar Bouncing Signaling Weakness Across Markets
One of the primary variables for this recent correction across the crypto and equity markets is the strengthening of the U.S. dollar. The dollar strength index (DXY) landed on a significant support level and marked a temporary low with a daily bullish divergence.
Since then, the dollar has been rallying upward, causing other inversely correlated markets to drop south.
The first area of resistance is constructed around the 92-points level. This area of resistance would automatically mean that other markets could correct further.
The ultimate level to watch for Bitcoin traders is the weekly time frame, which is the 21-week moving verage. In 2016 and 2017, Bitcoin’s price rested on this moving average as support through the entire bull cycle.
It’s not unlikely to have a similar test happen in the coming months, and it would suit with the likelihood of some consolidation before continuation. However, investors shouldn’t be worried at all about the current value of the 21-week MA. It’s a lagging indicator, however, which means it’s going to crawl up in the coming weeks toward the $25,000 area.
That region would mean a correction of around 40% for the crypto markets, which is also something that has happened more than once in previous bull cycles before new highs.
Bitcoin’s Big Drop Again Coincides With Dollar Bounce In Forex Markets
Bitcoin continues to trade in the opposite direction to the Dollar Index in a reflection of the cryptocurrency’s maturation as a macro asset like gold.
The top cryptocurrency by market value slumped to $32,400 early on Monday, having set record highs above $41,800 on Friday.
The crash came alongside a bounce in the Dollar Index (DXY), which tracks the greenback’s value against major currencies. The DXY has jumped to two-week highs near 90.50, extending a two-day winning streak. The index reached a 33-month low of 89.21 on Jan. 6, according to TradingView.
Since the major markets crash in March, bitcoin (BTC, -15.86%) and the index have trended in opposite directions, with bitcoin witnessing consolidation or correction during DXY’s temporary recovery rallies.
“Bitcoin’s value increased as the money supply and inflation expectations grew. At the same time, the dollar depreciated to multi-year lows, resulting in an inverse correlation between the government-backed fiat and decentralized digital asset,” Kaiko Research noted in its December market report.
Bitcoin’s price fell from $12,000 to $10,000 in early September and remained sidelined for the rest of the month as the dollar index bounced from 91.75 to 94.75. Similar action was observed in June 2020.
The cryptocurrency’s rally resumed in October as the foreign exchange markets began selling the dollar on expectations of additional U.S. fiscal stimulus. A steep drop in the DXY accompanied the cryptocurrency’s meteoric rise from $15,000 to above $41,000 seen over the past two months or so.
The inverse correlation isn’t surprising, given that publicly listed companies such as MicroStrategy are buying bitcoin to preserve the inflation-adjusted value of their treasury assets, mainly cash (USD).
“What we’re trying to do is preserve our treasury; the purchasing power of the cash is debasing rapidly,” MicroStrategy’s CEO Michael Saylor told CoinDesk in November.
The dollar’s latest bounce looks to have been fueled by a rise in U.S. Treasury yields.
Bitcoin is not the only asset falling alongside the dollar’s recovery rally. Gold, the classic inflation hedge, declined to a one-month low of $1,817 early Monday. The yellow metal peaked at a multi-week high of $1,959 last week as the DXY found a temporary bottom.
It remains to be seen if a continued rally for the dollar, if any, will fuel a deeper drop in bitcoin.
At press time, bitcoin is trading near $33,520, representing a 15% drop on a 24-hour basis.
Is The Weakness Of Bitcoin After The ‘Elon Musk Pump’ Hinting At A Bull Trap?
Bitcoin is slowing down and weakening on-chain metrics are forcing traders to turn cautious in the short term.
The price of Bitcoin (BTC) is showing overall weakness as it struggles to establish $34,000 as a support level. Overall, BTC appears to be stagnating without signs of a short-term relief rally, leading traders to be cautious.
One concerning trend is that the volume of Bitcoin has been stagnating along with its price, apart from the “Elon pump” on Jan. 29. This trend indicates that there is an overall drop in buyer demand since the $42,000 top despite BTC hovering in the low $30,000 region.
Bitcoin Gets Choppy After Revisiting $38,000
On Jan. 29, the price of Bitcoin rose to as high as $38,461 on Binance after Tesla CEO and the world’s richest man, Elon Musk, ostensibly showed support for Bitcoin.
However, before this rally, on-chain analysts were already warning that the momentum of Bitcoin was slowing.
Ki Young Ju, the CEO of CryptoQuant, for example, pinpointed the high selling pressure from Bitcoin miners as a sign of a short-term bearish scenario.
Although the price of Bitcoin briefly surged 14%, it snapped back down to sub-$34,000 within 24 hours. Hence, weakening on-chain indicators were likely a warning that BTC would retrace most of its “Elon pump” gains.
Ki Wrote Before The Rally:
“Exchange Whale Ratio hit the eight-month high, meaning $BTC might have a large red candle if the price drops. It’s supposed to be below 85% if this bull-run is legit. Otherwise, it’s likely to be a bull trap.”
Whales likely sold as the price of Bitcoin abruptly surged to the $38,000 resistance level, causing a sharp correction.
With shaky on-chain indicators and some selling pressure coming from miners, traders are also showing caution about longing BTC/USD in the near term.
A pseudonymous trader known as “Salsa Tekila” said that he is not using leverage until Bitcoin breaks out or drops back to $30,000. He said:
“We’re at that point where $BTC is far enough from the 30k for me not to be comfortable longing with any form of leverage but at the same time I wouldn’t short. Therefore being spot long until a big down / legacy open / probably Monday morning is best. NO LEVERAGE”
Meanwhile, another popular pseudonymous trader known as “Byzantine General” argues that the rally is broken. Hence, even if Bitcoin is bullish in the macro picture, more downside is possible until it sees a convincing breakout on lower time frames. He noted:
“The bull run is still on IMO, but the rally is broken. If we re-claim the yearly TWAP we can continue ze pump, but until then it looks kinda meh.”
What To Watch Out For
Traders and technical analysts are closely observing Bitcoin’s reaction to the $34,500 to $35,000 range.
If Bitcoin breaks out of it with strength, momentum, and high volume, then the probability of a short-term trend reversal rises.
However, if Bitcoin struggles to retest the $34,500 resistance level and continues to stagnate in the $33,000 region, the risk of a further breakdown to the $33,000 support remains.
Additional signs that BTC price could see another pullback include the Crypto Fear and Greed index remaining at “extreme greed” levels and Google searches for “Bitcoin” dropping by 50% since multi-year highs seen earlier this month.
‘A Good Thing’: Elon Musk Says He’s a Supporter of Bitcoin
Elon Musk once again sent ripples through the price of Bitcoin after declaring that he’s a supporter of the largest cryptocurrency.
Speaking on social audio app Clubhouse, the billionaire said at this point he thinks “Bitcoin is a good thing,” adding he’s “late to the party” and should have bought the cryptocurrency eight years ago.
The digital coin spiked to almost $34,500 Monday amid the comments, before easing back. It surged as much as 16% on Jan. 29 to over $38,000 after Musk changed his Twitter profile to “#bitcoin.” That rally mostly ebbed by Monday.
Cryptocurrencies have been buffeted recently by volatile retail-investor demand shaped online by Twitter feeds and Reddit forums. Dogecoin — a Shiba Inu-themed digital coin that started as a joke — rallied into the top 10 cryptocurrencies by market value last week before plunging over the weekend.
On Clubhouse, Musk said he doesn’t have a strong view on other cryptocurrencies and that his comments on Dogecoin are meant as jokes, adding “the most ironic outcome would be Dogecoin becomes the currency of Earth in the future.”
Bitcoin has shed about $8,000 since reaching an all-time high of almost $42,000 in early January but remains up more than 260% in the past year.
Some argue Bitcoin is winning a wider investor base because it’s muscling in on gold as a hedge for risks such as dollar weakness or faster inflation. Others see a precarious rally propelled largely by speculation atop a tide of stimulus.
“Bitcoin is really on the verge of getting broad acceptance by conventional finance people,” Musk said in the Clubhouse comments.
Others see some more immediate risks for Bitcoin, whose latest boom has evoked memories of a 2017 ascent that gave way to a bust.
The digital asset could be due for a “drawdown” because its climb is “steeper than any other financial innovation or asset bubble of the past 50 years,” John Normand, a strategist at JPMorgan Chase & Co., wrote in a note Friday.
It would be the most “entertaining and ironic outcome” if dogecoin “becomes the currency of earth in the future,” Musk also said.
Tesla and SpaceX CEO Elon Musk has clarified that he is a bitcoin supporter, if a bit “late to the party.”
Talking on invitation-only audio-chat app Clubhouse on Monday, Musk said, “I should have bought [bitcoin] eight years ago … I do at this point think bitcoin (BTC, +0.84%) is a good thing. I am a supporter.”
The Tesla CEO further said bitcoin, the top cryptocurrency by market cap, is “on the verge of getting broad acceptance by conventional finance people.” He added that he did not have a “strong opinion on other currencies.”
Musk did address popular meme-friendly cryptocurrency dogecoin (DOGE, +37.16%), saying he occasionally makes jokes about the coin. While dogecoin is “made as a joke,” he said, it would be the most “entertaining and ironic outcome,” if DOGE became the “currency of earth in the future.”
“Fate loves irony,” he said.
In the past, Musk has sometimes teased the crypto community by name-dropping bitcoin and dogecoin, but never clarified if he is a supporter any cryptocurrency.
The new comments come several days after Musk changed his Twitter bio to read “Bitcoin,” prompting a 15% rise in the price of the cryptocurrency. The sudden rise also caused the liquidation of $387 million-worth of bitcoin short positions.
U.S. Annual Trade Gap Grows To Biggest Since Financial Crisis
The U.S. last year posted its biggest annual trade deficit since 2008 as the global health crisis depressed export markets for American companies.
The gap in trade of goods and services widened to $678.7 billion in 2020 from $576.9 billion in 2019, according to Commerce Department data released Friday. The December deficit narrowed 3.5% from the prior month to $66.6 billion, but is wider than the $65.7 billion median estimate of economists.
The pandemic played a pivotal role in spoiling Donald Trump’s four-year push to rebalance the deficit, with Covid-19 crimping demand and upending supply chains. The former president slapped hundreds of billions of dollars of tariffs on the European Union and on China, sparking a trade war that hurt U.S. manufacturing and agriculture even as it protected some slices of industry like steelmakers.
China regained the top spot among U.S. trade partners for goods after finishing behind Mexico and Canada in 2019. The Asian nation and the U.S. a year ago signed the first phase of a trade agreement that’s supposed to see China buying an extra $200 billion of American goods in two years, the result of nearly three years of contentious talks that roiled markets.
A cease-fire phase-one trade agreement in January 2020 included significant purchase targets for U.S. exports in exchange for no imposition of new tariffs. Though Chinese purchases have undershot goals, U.S. exports did perform better than imports in 2020. As the U.S. economy posted strong recovery in the second half, imports from China bounced, echoing old patterns. Yet a full return to the old normal is unlikely as political tensions remain and supply chains diversify, including some re-shoring of production in the U.S.
— Andrew Husby, Economist
For the full year, exports plunged 16%, the most in six decades of data, to $2.13 trillion, the least since 2010. The decline was propelled by a 61% drop in travel, which represents visitors to the U.S., to $76.1 billion. Transport exports retreated by more than one-third to $56.4 billion.
Imports declined 9.5% to $2.81 trillion, the smallest value in four years.
The merchandise-trade deficit for 2020 swelled to $915.8 billion, the most since records started in 1961, while the nation’s surplus in services fell 18% to $237.1 billion, the smallest since 2012.
Overall, the value of U.S. exports plus imports in December rose to $446.5 billion, the highest since February, but still down from $469 billion at the end of 2019.
As a share of the economy, the overall trade gap widened to 3.2% of gross domestic product from 2.7% at the end of 2019. While that’s the biggest year-end shortfall since 2011, it’s still significantly smaller than in the decade before the last recession, when it approached 6%.
Bitcoin Climbs Above $56,000 As Musk Backs Crypto Over Cash
Billionaire Elon Musk defended Tesla Inc.’s $1.5 billion Bitcoin investment on Twitter, calling the cryptocurrency a “less dumb” version of cash.
“When fiat currency has negative real interest, only a fool wouldn’t look elsewhere,” Musk said in a reference to the sub-zero returns on cash caused by negative-yielding debt. The comments pushed Bitcoin to a record on Friday, with prices climbing above $53,000.
In a sense, Musk’s comments sum up one of the big issues facing markets this year. With so much cash being pumped into the financial system from governments fighting the pandemic, investors are increasingly worried about inflation and looking for alternative places to put their money.
“Having some Bitcoin, which is simply a less dumb form of liquidity than cash, is adventurous enough for an S&P 500 company,” Musk wrote, adding that Tesla’s decision to buy Bitcoin doesn’t directly reflect his opinion.
“Bitcoin is almost as bs as fiat money. The key word is ‘almost,’” he added.
Bitcoin was up as much as 2.4% to $53,263 as of 9:55 a.m. Friday in New York. Just this week, prices have jumped about 10%.
Musk’s posts were in response to remarks by Binance Holdings Ltd.’s chief Changpeng Zhao. In a Bloomberg Television interview, Zhao wondered why Tesla bought Bitcoin if he’s so “gung-ho” on Dogecoin. Musk said he’s an engineer, not an investor, and doesn’t own any publicly traded stock besides Tesla.
This year, the billionaire has tweeted about cryptocurrency-related topics more frequently, with his memes and jokes about Bitcoin and Dogecoin — a tongue-in-cheek digital currency — often moving markets.
Bill Gates Makes The Most Stupid Anti-Bitcoin Statement Of The Year
He warns Bitcoin buyers: “If you have less money than Elon Musk, watch out”.
If you’re the world’s richest person, most everyone on the planet has less money then Elon Musk!
The Microsoft founder thinks anyone with less money than the world’s richest man should “watch out” when it comes to Bitcoin.
Microsoft founder Bill Gates has issued a warning to would-be Bitcoin (BTC) buyers looking to follow Elon Musk’s investment strategy. Speaking to Bloomberg’s Emily Chang, Gates suggested Musk had access to sophisticated trade management techniques that the average investor isn’t privy to.
When asked about the susceptibility of Bitcoin to tumble in price in reaction to a mere tweet — undoubtedly a reference to Musk’s own social media posts — Gates said Musk was probably insulated from such market crashes:
“Elon has tons of money and he’s very sophisticated so, you know, I don’t worry that his Bitcoin would randomly go up or down.”
On Tuesday, a little over two weeks since Tesla’s $1.5 billion acquisition of Bitcoin was announced, the price of Bitcoin fell 20%, from $58,258 to $46,624. At the same time, almost $400 billion was wiped off the global market cryptocurrency market capitalization.
Interestingly enough, the crash occurred just hours after Musk himself expressed the opinion that the then-current prices of Bitcoin and Ether (ETH) were “high.” Whether this was a criticism or an attempt to deflect heat from a possible investigation into Musk’s influence on crypto prices, the entire market plunged in the aftermath.
Gates said it would be a mistake for the average investor to blindly follow the mania of optimism surrounding Musk’s market moves, telling those who aren’t billionaires to “watch out.” He said:
“I do think people get drawn into these manias who may not have as much money to spare. So, I’m not bullish on Bitcoin, and my general thought would be: If you have less money than Elon, you should probably watch out.”
The Microsoft founder raised the point of Bitcoin’s energy consumption, suggesting that the cryptocurrency didn’t return much in the way of output.
“There are things we invest in in society which produce output. Bitcoin happens to use a lot of energy. It happens to promote anonymous transactions — they’re not reversible transactions,” said Gates.
According to Gates, digital currencies aren’t necessarily a bad thing; he just thinks they should be transparent, reversible and, essentially, centralized.
Gates went on to describe some of the work carried out using digital currencies since the start of the COVID-19 pandemic, noting that the Gates Foundation had used the technology to enable governments to distribute relief funds to their citizens.
Elon Musk Lays Out When Tesla Will Begin Accepting Bitcoin Payments
Musk responded to a Cointelegraph tweet about Sygnia CEO Magda Wierzycka calling for the SEC to investigate him over alleged Bitcoin price manipulation.
Tesla CEO Elon Musk said his electric-vehicle company will start accepting Bitcoin (BTC) payments once there’s confirmation that miners are utilizing clean energy, offering a glimmer of hope that the FUD surrounding digital assets could soon subside.
Musk responded to a Cointelegraph tweet about recent accusations from Sygnia CEO Magda Wierzycka, who called on the United States Securities and Exchange Commission to investigate the billionaire for allegedly manipulating Bitcoin’s price.
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.
— Elon Musk (@elonmusk) June 13, 2021
According to Wierzycka, Musk knowingly pumped the price of Bitcoin only to sell a “big part of his exposure at the peak.”
“This is inaccurate,” Musk said in a Sunday response. “Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving [the] market.”
As Cointelegraph reported, Musk acknowledged in April that Tesla had sold a portion of its Bitcoin holdings to prove the asset’s liquidity as an alternative to cash. Just one month earlier, the billionaire confirmed that Tesla had added $1.5 billion worth of BTC to its balance sheet and would begin accepting the digital asset as payment for its vehicles.
However, Tesla’s embrace of Bitcoin-as-a-payment was short-lived after Musk flagged concerns over the cryptocurrency’s energy usage. On May 12, Musk tweeted that his company would no longer accept Bitcoin payments due to the network’s “increasingly rapid use of fossil fuels…”
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
Musk’s tweet coincided with a slew of negative headlines about Bitcoin’s energy usage, China’s intent to ban Bitcoin mining and an overextended crypto rally that was showing signs of weakness. The news cycle helped trigger one of Bitcoin’s most painful episodes, culminating in a 54% drop between mid-April and mid-May.
On Sunday, Musk Laid The Groundwork For When Tesla Will Once Again Accept Bitcoin Payments:
“When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions.”
As Cointelegraph reported, Musk was recently invited to a meeting of Bitcoin miners by MicroStrategy CEO Michael Saylor. The Bitcoin Mining Council, a voluntary, self-regulating industry body, emerged from the meeting with a mandate to exercise more renewable energy options and boost the transparency of cryptocurrency mining.
Despite all the criticism about Bitcoin mining, it’s estimated that a strong majority of miners already use alternative energy sources. Yassine Elmandjra, an analyst with Ark Investments, told CNBC in April that roughly three-quarters of miners use carbon-free sources in their operations.
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