Riel Roussopoulos
Elon Musk changes Twitter bio to #bitcoin, chaos ensues
As the man himself said, it was inevitable.
On Friday, Tesla CEO Elon Musk changed his Twitter bio to “#bitcoin.” This alone perhaps wouldn’t be that interesting — after all, Musk expressed his interest in Bitcoin and cryptocurrencies before — but Musk followed up with a cryptic tweet that might indicate he’s actually bought some Bitcoin.
“In retrospect, it was inevitable,” Musk tweeted.
This could mean anything and nothing. It could be related to DOGE, a joke cryptocurrency Musk is a fan of and has recently been tweeting about. Or it could be related to something that’s not crypto-related.
However, cryptocurrency Twitter immediately started speculating about Musk buying Bitcoin, or even Tesla investing a part of its cash pile into the cryptocurrency. Software company MicroStrategy has invested a massive amount of money into Bitcoin in recent months, and its CEO Michael Saylor has been vocal about Bitcoin being a better alternative than cash for a company’s reserves.
Yes. I have purchased over $1.3 billion in #BTC in past months & would be happy to share my playbook with you offline – from one rocket scientist to another.
— Michael Saylor (@michael_saylor) December 20, 2020
In December, Saylor actually offered Musk — through Twitter — some advice on how to purchase large amounts of Bitcoin in a company’s name.
At this point, we don’t know what, exactly, Musk has referred to in his latest tweet, or whether he or Tesla own, or plan to own, any Bitcoin. But that didn’t stop speculators from driving the price of Bitcoin up by 19 percent in less than an hour, up from roughly $32,000 to just short of $38,000. The pump has now subsided, and the price is sitting at around $36,000.
On top of that, consider that the announcement came immediately after the largest options expiry in bitcoin’s history, not giving traders much chance to reestablish their long exposure or close their short hedges. Shorts just got taken for a wild ride.
— Alex Krüger (@krugermacro) January 29, 2021
Musk’s tweet came at an extremely volatile and frankly, just plain weird time for financial markets. First, it came after a major options expiry for Bitcoin, which arguably made it easier for the price to move in either direction.
Also, Musk’s comments came amid a trading war between a bunch of Reddit traders and some massive hedge funds, which pushed the price of GameStop stock up to unprecedented levels. The battle is still raging on, with volatility forcing some trading platforms, including Robinhood, to temporarily halt buying of GameStop and several other stocks.
Musk is no stranger to wreaking havoc on the financial markets. His infamous “taking Tesla private” tweet caused the company shares to surge, landing Musk in trouble with the U.S. Securities and Exchange Commission.
Disclosure: The author of this text owns, or has recently owned, a number of cryptocurrencies, including BTC and ETH.
Published at Fri, 29 Jan 2021 10:59:39 +0000
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