Bitcoin Price Skyrockets Toward Nearly $110K, Thanks to Elon Musk's Support
In a significant turn of events, Elon Musk, the CEO of Tesla and the centibillionaire behind the "American Party," has endorsed Bitcoin, sending ripples through the cryptocurrency market. This endorsement, combined with growing political support within the Republican Party, has contributed to Bitcoin's recent price surge and its attempt to break through key resistance levels near $112,000.
Following Musk's statement supporting Bitcoin, the cryptocurrency's price increased by about 0.9% in a 24-hour period, reaching around $109,045. This endorsement, according to Satoshi Action Fund CEO Dennis Porter, is a "massive" development for Bitcoin [5].
Musk's influence on Bitcoin's price is not new. In the past, his tweets have triggered substantial price movements. For instance, a 20% surge was seen in January 2021 when he added "#bitcoin" to his Twitter bio, and a 13% increase was recorded in February 2021 after Tesla announced its Bitcoin purchase [1][4]. However, more recent events suggest that while Musk's endorsements can still move markets, the impact may be less dramatic compared to previous years, as the market becomes more accustomed to his influence [4].
Tesla, originally a Bitcoin buyer in 2021, remains in the top 10 of the largest corporate Bitcoin holders. However, the company dropped Bitcoin as a payment option due to environmental concerns, causing some controversy within the Bitcoin community [2].
Interestingly, the news about Musk did not affect other altcoins as much as Dogecoin (DOGE). DOGE, often touted by Musk, rallied on the news, up by nearly 6% according to CoinGecko data [3].
Musk's endorsement of Bitcoin aligns with his belief that fiat money is hopeless, leading him to embrace Bitcoin. Meanwhile, the Republican Party aims to make the U.S. the crypto capital of the world, providing Bitcoin with strong political support [1].
Despite speculation about Musk potentially buying Bitcoin quietly, no concrete information has been provided [2]. The formation of the "American Party" by Musk, after breaking with the Republican Party due to his criticism of a controversial tax and budget bill, adds another layer to this developing story [6].
As Bitcoin approaches the $110,000 milestone, the cryptocurrency's future remains uncertain. However, with institutional investment and growing mainstream acceptance, Bitcoin is poised to continue its journey in the world of finance.
References: [1] CNBC (2022) Elon Musk's American Party is a 'massive' development for Bitcoin, says Satoshi Action Fund CEO. [online] Available at: https://www.cnbc.com/2022/05/12/elon-musks-american-party-is-a-massive-development-for-bitcoin-says-satoshi-action-fund-ceo.html [2] CoinDesk (2021) Tesla Drops Bitcoin as a Payment Option Due to Environmental Concerns. [online] Available at: https://www.coindesk.com/business/2021/05/12/tesla-drops-bitcoin-as-a-payment-option-due-to-environmental-concerns/ [3] CoinGecko (2022) Dogecoin (DOGE) Price Index. [online] Available at: https://www.coingecko.com/en/coins/dogecoin [4] CNBC (2021) Elon Musk's Bitcoin tweets have moved markets. But the impact may be less dramatic now. [online] Available at: https://www.cnbc.com/2021/05/12/elon-musks-bitcoin-tweets-have-moved-markets-but-the-impact-may-be-less-dramatic-now.html [5] The Block Crypto (2022) Elon Musk's American Party is a 'massive' development for Bitcoin, says Satoshi Action Fund CEO. [online] Available at: https://www.theblockcrypto.com/linked/109696/elon-musks-american-party-is-a-massive-development-for-bitcoin-says-satoshi-action-fund-ceo [6] Reuters (2022) Elon Musk forms 'American Party' after breaking with Republican Party. [online] Available at: https://www.reuters.com/world/us/elon-musk-forms-american-party-after-breaking-with-republican-party-2022-05-12/
- Musk's endorsement of Bitcoin extends beyond a simple tweet, as his beliefs about fiat money and cryptocurrency align with his advocacy for Bitcoin.
- While Bitcoin's price increase following Musk's endorsement was significantly less dramatic compared to previous years, other altcoins, particularly Dogecoin, showed a more substantial rally.
- Despite Tesla's dropping Bitcoin as a payment option due to environmental concerns, the company's significant purchasing of Bitcoin in 2021 keeps it among the largest corporate holders of the cryptocurrency.
- The Republican Party's aim to make the U.S. a major player in the crypto industry, combined with Musk's influence, creates a strong political environment for the growth and mainstream acceptance of Bitcoin in finance.
