Speculation Over Elon Musk Tweet Prompts Bitcoin Selloff
May 17 2021 - 9:29AM
Dow Jones News
By Caitlin Ostroff
Bitcoin's dollar value fell more than 7% 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 $850 billion
from more than $1 trillion.
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 09:14 ET (13:14 GMT)
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