Bitcoin erases all gains since Musk’s initial big embrace
LONDON: What Elon Musk giveth, he also taketh away.
Bitcoin has erased all the gains it notched following Tesla Inc’s February 8 announcement that it would use corporate cash to buy the digital asset and accept it as a form of payment for its vehicles.
The world’s largest cryptocurrency has dropped roughly 40% from its record of almost $65,000 and was trading around $39,360 as of 6:36 am in London on Wednesday, a level last seen before the Ev-maker disclosed its investment.
Fuelling the volatility is Tesla CEO Musk himself, who surprised crypto advocates last week with an announcement that the company would no longer accept Bitcoin as payment. The mood music grew darker over the weekend, with Bitcoin dropping about 15% as Musk doubled-down on his criticism of the cryptocurrency’s environmental load.
Then on Tuesday, the People’s Bank of China conveyed a statement reiterating that digital tokens can’t be used as a form of payment, highlighting the regulatory risk hanging over cryptocurrencies. That helped to send
Bitcoin back to pre-february rury 8 levels. “These huge swings we have seen in crypto really highlight the speculative nature of crypto as an asset,” said Fiona Cincotta, senior financial markets analyst at City Index.
Following Tesla’s February announcement, Bitcoin hit its $64,870 peak in large part due to the company’s embrace of the coin.