Bitcoin rises after Tesla’s Musk reaffirms positive position

Bitcoin’s price continued rose over the weekend in the wake of the latest Elon Musk tweet

The price of bitcoin recovered over 10% over the weekend to trade just below $40,000 on Monday. The price of bitcoin was last up 4.5% mid trade on Monday after Tesla CEO Elon Musk reaffirmed his support for the cryptocurrency.

Tesla had suspended purchases of its vehicles using bitcoin last month due to climate change concerns. After Musk tweeted the decision in May, bitcoin fell by more than 10% while Tesla shares also dipped.

Change of heart

But over the weekend the SpaceX and Tesla CEO tweeted that the company would start accepting bitcoin as a mode of payment when there was evidence of “reasonable” clean energy use by miners.

He tweeted: “When there’s confirmation of reasonable (-50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions.” 

Previously, Tesla had bought $1.5bn of bitcoin in February and in March the company had committed itself to accept the cryptocurrency as payment for cars.

Other bitcoin influencers

The price of bitcoin has also been boosted earlier this month by El Salvador’s decision to make bitcoin legal tender and its commitment to using green energy from volcanoes to mine it 

Katharine Wooller, managing director UK and Ireland, Dacxi said Musk‘s comments aside, bitcoin was on track for “monster gains” by the end of the year.

“Contrary to the mainstream press Elon Musk is not CEO of Bitcoin,” said Wooller. ”At the risk of misquoting Monty Python he’s not the messiah of digital assets, he’s a naughty boy:  dipping in and out of inflammatory tweets when it suits him.

“Bitcoin lurching 11% over the weekend on the basis of his apparent volte-face to support the currency is an embarrassment to the fickle nature of investor sentiment; moreover, it does not undo the 14% drop caused by his negative comments of mid-May.  It will be interesting to see if the weekend’s events are enough fuel to ignite a bull market after recent corrections.

”Bitcoin to my mind is a cheap buy at current prices; the stock to flow market, thus far correct, suggests we are still on track for monster gains by year end – $288k should the model continue to prove accurate.”

Further reading: Cryptocurrencies rebound after $900bn market cap contraction

Further reading: Bitcoin sinks 11% in 30 minutes as China vows to “crack down” on “mining and trading”

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