Elon Musk Tweet Prompts Bitcoin Selloff -- 2nd Update
May 17 2021 - 6:26PM
Dow Jones News
By Caitlin Ostroff
Bitcoin continued to be under some pressure after a tweet from
Tesla Inc. Chief Executive Elon Musk prompted speculation that the
electric-car maker had sold, or would sell, its holdings of the
cryptocurrency.
While Mr. Musk later tweeted that Tesla hadn't sold any bitcoin,
the selloff demonstrated his power to shift cryptocurrency markets.
Last week, he said Tesla had suspended accepting bitcoin as payment
for its vehicles, citing concerns over its carbon footprint. Since
then, the market value of bitcoin has fallen to about $835 billion
from more than $1 trillion.
Bitcoin traded as low as $42,102.35 overnight -- before
rebounding Monday afternoon to $44,843.38. It is down about 30%
from its record approaching $65,000 a month ago.
Mr. Musk's recent posts on Twitter have shown that his
sentiments are having a significant impact on the market, said
Chris Bendiksen, head of research at London-based asset management
firm CoinShares.
"It's a little too much for my liking," he said.
The Tesla chief has long been a prolific tweeter regarding
cryptocurrencies, sharing memes and posts about the joke
cryptocurrency dogecoin.
Earlier this year, Tesla said it added $1.5 billion worth of
bitcoin to its corporate treasury.
The company sold $272 million worth of bitcoin in the first
quarter, helping it report record earnings.
The attention on bitcoin from Mr. Musk likely helped usher new
individual investors to buy it, investors and analysts say.
Those traders might be more likely to sell based on Mr. Musk's
tweets, increasing volatility.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
May 17, 2021 18:11 ET (22:11 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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