Musk’s latest tweet about the possibility of allowing Tesla to conduct bitcoin transactions caused the currency to soar by nearly 10%.
Tesla CEO Elon Musk said on Twitter that the electric car manufacturer will resume allowing bitcoin transactions when miners verifying transactions use more renewable energy.
He said in a tweet on Sunday: “Tesla will resume allowing Bitcoin transactions when it is confirmed that miners with positive future trends are using clean energy reasonably (about 50%).”
Bitcoin soared 9.8% on Sunday to $39,035.47, an increase of $3,492.71 from the previous day’s closing price.
Musk’s post is a response to a report by Cointelegraph, which quoted Magda Wierzycka, executive chairman of South African asset management company Sygnia, as saying that Musk’s recent tweets about Bitcoin should prompt the US Securities and Exchange Commission to investigate.
Bitcoin, the world’s largest and most famous cryptocurrency, is up 40.7% from its annual low of $27,734 on January 4. As of 7 am Hong Kong time on Monday (23:00 GMT on Sunday), Bitcoin has fallen by about 1% to US$38,881.
Ether, a token related to the Ethereum blockchain network, surged 7% to US$2,532.77 on Sunday, an increase of US$165.77 from the previous closing price.
Musk also said that Tesla sold about 10% of its shares to confirm that Bitcoin can be easily liquidated without affecting the market.
Jonathan Cheesman, head of over-the-counter and institutional sales at the crypto derivatives exchange FTX, said: “This tweet adds to the positive momentum because Elon’s stance seems to be easing and provides a near goal “Because market speculation is about to buy from MicroStrategy, and G-7’s comments on cryptocurrencies are neutral or even optimistic about digital innovation, the rebound has already begun.”
The CEO of MicroStrategy Inc, Michael Saylor, has become a vocal evangelist for Bitcoin and last week increased the issuance of junk bonds aimed at buying cryptocurrencies from US$400 million to US$500 million.
In the past few months, Musk has brainwashed Bitcoin and other digital tokens. In February of this year, Tesla announced that it had purchased $1.5 billion in Bitcoin and expressed its intention to start accepting Bitcoin as payment for vehicles. In March, Musk wrote on Twitter, “You can buy Tesla with Bitcoin now,” but in May he stated that this practice was suspended due to concerns about the use of fossil fuels in Bitcoin mining and trading. After that tweet, Bitcoin fell by more than 10%.
As the comments reported by Wierzycka indicate, the U-turn has been controversial, partly because the actions of Tesla and Musk have had a significant impact on the price of Bitcoin. While there are other issues, from positive aspects of institutional adoption and diversification to negative aspects of sustainability and regulatory concerns, Musk’s tweets can often change momentum and can dominate the narrative in days or weeks.