Since setting a record of nearly $ 42,000 per coin, Bitcoin has lost its momentum. However, the recent moves of billionaire Elon Musk continuously “heat” for this currency.
According to Coindesk, Bitcoin price on February 1 increased sharply after Tesla boss Elon Musk once again made comments in favor of Bitcoin. The world’s largest cryptocurrency is trading around the threshold 34,600 USD/ copper, while the price of Ether – Bitcoin’s major rival – is at a level 1,311 USD/ VND, 11% lower than the peak of January 25.
Bitcoin price has been volatile in the past 7 days. On January 27, the price even was pushed below the threshold 30,000 USD/copper. However, Bitcoin received a strong “heat” thanks to the support of billionaire Elon Musk.
After the Tesla boss changed the description on Twitter to “#Bitcoin” on January 29, the price of the cryptocurrency increased steadily, surpassing 37,000 USD/copper.
Billionaire Elon Musk shows his support for the world’s largest cryptocurrency. Photo: Reuters.
“I should buy Bitcoin 8 years ago”
However, Bitcoin’s rally on Jan. 29 did not last long. After approaching the threshold 38,000 USD/ dong, Bitcoin quickly dropped to the price zone 33,000 USD due to profit taking pressure.
As of February 1, Musk continued to insist that “Bitcoin is a good investment” at the moment. On the Clubhouse platform, the Tesla boss said he was “late” and should have bought the cryptocurrency eight years ago.
“Bitcoin is really on the verge of gaining broad acceptance among financiers,” Musk said.
Tesla boss moves come after trading platform Robinhood banned users from buying and selling shares of GameStop and some other stocks. After the ban, a series of traders poured money into the cryptocurrency market.
Financial expert Craig Erlam (based in the UK) describes “Musk brought Bitcoin to the Moon”. “The Tesla boss suddenly became the most influential person on Twitter, usurping former US President Donald Trump after his account was deleted. All Musk does is mention anything and everything. Investors are going to be crazy about it, ”commented Mr. Erlam.
Bitcoin prices climbed sharply following Tesla boss comment. Photo: Coindesk.
Last 12 months, Bitcoin saw huge cash inflows as a result of a skyrocketing global money supply. Governments around the world must increase spending to protect jobs and support workers. Economic stimulus packages of unprecedented scale put pressure on fiat currencies.
Meanwhile, Bitcoin is considered a “hedge” against inflation. Additionally, with low maintenance rates, the opportunity cost of holding Bitcoin decreases, prompting investors to buy.
Cryptocurrencies have also received support from well-known investors. In early January, Bitcoin set a record high $ 41,940/copper. Since then, the coin has declined in value by 17.5%. However, the Bitcoin price is still up nearly 300% from the previous 12 months and has been climbing 16.46% since the start of the year.
Bitcoin, Tesla stock are all bubbles?
However, some Wall Street investors warned that Bitcoin’s rally was nothing more and nothing less. On January 29, Mr. John Normand, strategist at JPMorgan, warned that cryptocurrencies will fall apart, because their gains are steeper than any asset bubble in the past 50 years.
Expert Gabriel Makhlouf, of the European Central Bank (ECB), warned Bitcoin investors “should be mentally prepared for the possibility of losing money”. “I don’t know why investors are rushing to invest in cryptocurrencies. They see them as a real asset ”, Bloomberg quoted Mr. Gabriel Makhlouf, also the Governor of the Central Bank of Ireland, commented.
European Central Bank (ECB) President Christine Lagarde also criticized Bitcoin “facilitating criminal acts”. Bitcoin is highly speculative, she stressed, allowing for “illegal businesses and money laundering”.
In fact, many experts see Bitcoin as a bubble similar to Tesla stock – the electric car company of billionaire Elon Musk. According to the BloombergWith a huge set of stimulus measures and confidence in the post-pandemic outlook, individual and institutional investors are enjoying the most lax financial conditions ever.
In just 12 months, Tesla’s stock price skyrocketed 800%. “It is simply a sign of a speculative surplus in the financial markets,” the experts said Bloomberg positive.
According to the Zing / Bloomberg
Why are people so obsessed with Bitcoin?
The Bitcoin craze is back with unpredictable fluctuations that have attracted the attention of public opinion and investors alike.