Cryptocurrencies slid during Asian trading hours on Monday, with bitcoin dropping more than 5%, as investors took profits from a record-breaking rally.
Cryptocurrencies slid during Asian trading hours on Monday, with bitcoin dropping more than 5%, as investors took profits from a record-breaking rally.
Bitcoin fell as much as 5.6% to $45,914 and rival cryptocurrency ethereum dropped more than 8% to $1,655. Both had hit record highs in recent days as the asset class gains more mainstream acceptance.
The announcement of Tesla`s investment, buried in Tesla`s 2020 annual report, follows months of tweets by Musk related to cryptocurrencies including Bitcoin BTC=BTSP, sometimes helping fuel its rally. The cryptocurrency jumped 10% on Monday following Tesla`s disclosure
Tesla`s TSLA.O $1.5 billion Bitcoin investment unveiled on Monday may not surprise CEO Elon Musk`s followers on Twitter, where he has shown himself as a major proponent of the soaring cryptocurrency.
The announcement of Tesla`s investment, buried in Tesla`s 2020 annual report, follows months of tweets by Musk related to cryptocurrencies including Bitcoin BTC=BTSP, sometimes helping fuel its rally.
The cryptocurrency jumped 10% on Monday following Tesla`s disclosure.
In a December exchange on Twitter, Musk asked MicroStrategy MSTR.O CEO Michael Saylor, who recommended Tesla buy Bitcoin, about the possibility of “large transactions” to convert some of Tesla`s balance sheet to the cryptocurrency.
Saylor is a Bitcoin bull and his software company has bought around 71,000 bitcoins, currently worth close to $3 billion. MicroStrategy`s stock jumped 18% on Monday, bringing its gain in 2021 to 146% as traders view it as a play on Bitcoin.
Replying in May to a tweet by author J.K. Rowling about Bitcoin, Musk wrote that massive debt taken on by central banks made Bitcoin more attractive. He added that he owned only a quarter of a bitcoin, which was trading below $10,000 at the time.
Last month, Musk added “#Bitcoin” to his Twitter profile, sparking a 14% surge in the digital currency, and in December he tweeted, “Bitcoin is my safe word.”
Driven in part by interest from institutional investors, the price of Bitcoin has quadrupled since in the past four months, surging far beyond record highs set in 2017. Some investors view it a hedge against inflation.
Tesla also said in its filing it would soon accept Bitcoin as a form of payment.
In chat on social media app Clubhouse that drew thousands of listeners earlier this month, Musk said Bitcoin was “on the verge” of being more widely accepted among investors.
