Hello and welcome to our continued coverage of the global economy, financial markets, euro area and business.
Bitcoin is on a wild ride today as Tesla CEO Elon Musk raised the alarm that the electric vehicle maker could sell its holdings – before clarifying that it hasn’t sold any bitcoin.
The drama started last night on Twitter (of course), when an account called @CryptoWhale tweeted:
“Bitcoiners are going to slap themselves next quarter when they find out Tesla has thrown away the rest of their holdings. With the amount of hate @Elon Musk becomes, I would not blame him… ”
Musk (who last week suspended plans to let Tesla customers pay in bitcoin) replied:
Bitcoin had already weakened last week, following Musk’s criticism of its high energy consumption and environmental impact.
And Musk’s word response last night sent bitcoin down to its lowest level since February, as fear swept through the crypto world that Tesla might have had. already sold its holding (although Musk said last week that Tesla would not sell any bitcoin).
It dropped as low as $ 42,212.56, Coindesk data shows – and further afield – record highs of over $ 64,000 recorded in April.
But … Musk has now returned to Twitter and said that:
To clarify the speculations, Tesla did not sell any Bitcoin.
This bounced bitcoin to around $ 44,500 in volatile trading – still down around 10%, and the lowest since the end of February.
Musk’s ability and willingness to change cryptocurrency prices with a single tweet may well deter other companies from following Tesla’s lead and putting bitcoin on their balance sheets.
Kyle Rodda of IG explains that the episode slows down Bitcoin’s transition to the mainstream:
In an exchange on a Twitter thread, the mercurial Mr. Musk hinted that Tesla, after reversing its decision to accept Bitcoin as a payment method, could “effectively” offload its holdings from the Treasury onto the asset.
Speculation has apparently led traders to try and kick-start Tesla’s potential move, as the push behind Bitcoin’s integration slows down further.
Naeem Aslam, analyst at Think about the markets, said “ Elon ” was the dominant word in the crypto market this weekend. But, he adds that bitcoin was already moving down – and could have gone down further …..
It is important to keep in mind that it is true that the current sell off in the price of Bitcoin is mainly due to Elon Musk. But the reality is that Bitcoin lost its bullish momentum a long time ago, and that’s because all of this positive Bitcoin news has failed to drive Bitcoin prices higher.
It was clear that Bitcoin prices were going too far and that a correction was due. This correction is currently underway, and it is likely that we may see the price of Bitcoin fall further. Short-term support for Bitcoin is near the 38K price level.
Also coming today
European stock markets opened a little higher, as concerns over the Indian variant of Covid-19 increase in the UK and coronavirus restrictions are further relaxed in England, Wales and the major part of Scotland.
A survey of New York-area factories and a new U.S. automaker health check will show how the U.S. economy is doing this month.
In the UK, the ONS is releasing a new report on ‘management practices, working from home and productivity’ during the pandemic.
A major case is brewing in the media space, US telecommunications giant AT&T has reportedly reached an agreement to combine its WarnerMedia unit – which includes CNN and HBO – with rival Discovery.
- 9:30 a.m. BST: UK Office for National Statistics report on working from home in the pandemic
- 1:30 p.m. BST: New York Empire State Manufacturing Index for May
- 3 p.m. BST: NAHB index of the US real estate market for May