Price of Bitcoin surges after Elon Musk says it is 'a good thing'

Posted Feb 03, 2021

The price of cryptocurrency bitcoin rose on Monday after Elon Musk, the billionaire Tesla CEO, said he was a ‘supporter’ of the cryptocurrency.

“Bitcoin is a good thing,” Musk said in comments broadcast on social audio app Clubhouse on Monday. Musk said he was “late to the party” in backing bitcoin. His comments triggered a wave of buying from would-be investors, who now see the cryptocurrency as a valuable asset, endorsed by the world’s richest man.

Bitcoin had risen on Friday to above $38,000 after Elon Musk changed his biography on the Twitter social network to simply “#bitcoin”.

Industry expert Stephen Kelso, Head of Markets, ITI Capital said, “Entrepreneurs like Elon Musk and MicroStrategy’s CEO, Michael Saylor are rapidly raising the profile Bitcoin as a trusted investment and expectation is building that more tech and corporate CFOs will follow their lead, backing what is now considered to be the ultimate long duration treasury reserve asset.

Mr Kelso continued, “We’ve seen a swelling in demand for Bitcoin from clients in the UK and across core emerging markets, which has sequentially reached new all-time highs in the currencies of the BRICS countries and other emerging markets. We believe the biggest thing that has changed in Bitcoin over the Global Currency Reserve (GCR) is the personal career risk of professional allocators and investors who now need to be able to point to the more fiduciary-responsible way to access Bitcoin. 

“The rate of change of the balance sheet expansion at the Fed and rest of the G4 since the Great Covid-19 Recession has brought these conditions to developed markets. The debasement of currency that is driving the asset-price inflation across asset classes is a familiar phenomenon to emerging market wealth and investment managers,” added Kelso.

Last week Musk also jumped on the GameStop price rise bandwagon, tweeting “Gamestonk”, a play on stock market memes, alongside a link to the WallStreetBets forum on Reddit, where users had banded together to pump up the value of the game retailer’s shares.

Musk added in his Clubhouse comments that his tweets about dogecoin, another less popular cryptocurrency, were “really just meant to be jokes”. The value of the dogecoin cryptocurrency, which was branded with a Shiba Inu meme, has increased sharply whenever Musk has tweeted about it.

He also made a series of notable claims in his first appearance on the app, including saying that Neuralink, a company that he founded to work on controlling computers with the human brain, had implanted a microchip in a monkey’s brain to enable it to play videogames.

Musk became the richest person in the world at the start of the year as the price of shares in Tesla, the US electric car pioneer, soared, but in recent weeks he has used his considerable following to talk up other investments.

Musk was one of the characters featured in a Star Wars-style poster, widely shared on the WallStreetBets page on Monday, for an imagined film about the GameStop frenzy.