Elon Musk once again sent ripples through the price of Bitcoin after declaring that he’s a supporter of the largest cryptocurrency.
Speaking on social audio app Clubhouse, the billionaire said at this point he thinks “Bitcoin is a good thing,” adding he’s “late to the party” and should have bought the cryptocurrency eight years ago.
The digital coin spiked to almost $34,500 Monday amid the comments, before easing back. It surged as much as 16% on Jan. 29 to over $38,000 after Musk changed his Twitter profile to “#bitcoin.” That rally mostly ebbed by Monday.
Cryptocurrencies have been buffeted recently by volatile retail-investor demand shaped online by Twitter feeds and Reddit forums. Dogecoin — a Shiba Inu-themed digital coin that started as a joke — rallied into the top 10 cryptocurrencies by market value last week before plunging over the weekend.
On Clubhouse, Musk said he doesn’t have a strong view on other cryptocurrencies and that his comments on Dogecoin are meant as jokes, adding “the most ironic outcome would be Dogecoin becomes the currency of Earth in the future.”
Bitcoin has shed about $8,000 since reaching an all-time high of almost $42,000 in early January but remains up more than 260% in the past year.
Some argue Bitcoin is winning a wider investor base because it’s muscling in on gold as a hedge for risks such as dollar weakness or faster inflation. Others see a precarious rally propelled largely by speculation atop a tide of stimulus.
“Bitcoin is really on the verge of getting broad acceptance by conventional finance people,” Musk said in the Clubhouse comments.
Others see some more immediate risks for Bitcoin, whose latest boom has evoked memories of a 2017 ascent that gave way to a bust.
The digital asset could be due for a “drawdown” because its climb is “steeper than any other financial innovation or asset bubble of the past 50 years,” John Normand, a strategist at JPMorgan Chase & Co., wrote in a note Friday.