Bitcoin soars 14% after Elon Musk namecheck on Twitter

Bitcoin jumped as much as 14% on Friday to a two-week high after Tesla Inc chief Elon Musk tagged the cryptocurrency in his Twitter biography.

Musk wrote simply “#bitcoin” in his biography on the social media site. The world’s biggest cryptocurrency was up 10.2% at $36,901 as of 10:05 GMT.

The billionaire entrepreneur, 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 center 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.

Bitcoin jumped over 300% last year, as bigger US investors and corporations sought exposure to the cryptocurrency. It touched an all-time high of $42,000 last month.

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% and 8% respectively. 

Increased demand from institutional, corporate, and more recently retail investors has powered bitcoin’s surge, attracted by the prospect of quick gains in a world of ultra-low yields and negative interest rates.
“We are seeing a continued demand spike driven largely by sustained and unprecedented institutional interest, showing no sign of abating as we move into 2021,” said Frank Spiteri of digital asset manager CoinShares.
JPMorgan strategists wrote on Jan. 5 that the digital currency has emerged as a rival to gold and could trade as high as $146,000 if it becomes established as a safe-haven asset.

Interest in the world’s biggest cryptocurrency soared last year, with investors viewing bitcoin as a hedge against inflation and an alternative to the depreciating dollar.

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