Bitcoin price rises dramatically as Elon Musk lends support to cryptocurrency on Twitter

Bitcoin’s price is dramatically surging after Elon Musk lent his support to the cryptocurrency.

The price was up 20 per cent over the last day, though has since settled down slightly.

January has already seen bitcoin’s price climb far above any record it had achieved before. The price of a single coin has reached over $40,000 this year, though it has fallen back again.

The latest increases saw it reach over $37,000.

The price increase came as Elon Musk appeared to throw his backing behind the cryptocurrency, changing his Twitter bio to simply “#bitcoin�, alongside its “B� symbol.

The cryptocurrency also seems to have benefited from the increased interest in other financial instruments that have followed the GameStop affair, in which a Reddit thread encouraged users to buy shares in the ailing video games retailer to hurt a hedge fund.

Since then, almost all cryptocurrencies have seen dramatic increases in their price. Dogecoin – a cryptocurrency created partly as a joke, which has become associated with the new interest in “memestocks� – is up 370 per cent over the last week.

Mr Musk, followed by 43.8 million users on Twitter, has a record of making market-moving comments on the site.

GameStop Corp, which has been at the centre of retail trading frenzy, surged 50% on Tuesday after Musk tweeted “Gamestonk!!”, along with a link to the Reddit Wallstreetbets stock trading discussion group. There, supporters affectionately refer to him as “Papa Musk.”

“Stonks” is a tongue-in-cheek term for stocks widely used on social media.

In December, Musk asked about the possibility of converting “large transactions” of Tesla’s balance sheet into bitcoin, in a Twitter exchange with a well-known advocate for the digital currency.

“That would be a very big deal,” said Christopher Bendiksen of digital asset manager CoinShares on Friday.

Traders also cited positive comments on bitcoin by hedge fund manager Ray Dalio as supporting sentiment.

The Bridgewater Associates founder wrote on Thursday that the cryptocurrency was “one hell of an invention,” adding that he viewed it as a “gold-like alternative asset.”

Smaller cryptocurrencies including ethereum and XRP that tend to move in tandem with bitcoin also jumped, as much as 5 per cent and 8 per cent respectively.

Additional reporting by Reuters