Today Bitcoin gets get another shot in the arm as its value careens past the $40,000 mark to new all-time highs.
In the past week, Bitcoin had deflated somewhat, sometimes moving back down to just over $30,000. That had a lot of people asking about short-term movement, although there’s a broader consensus that in the long term, Bitcoin is poised to go higher unless anything big changes.
Now, though, we have demonstrated short-term bullish behavior, and a source that shouldn’t be surprising to anyone who’s been following the markets in general.
William Suberg at Cointelgraph reports Elon Musk and his Tesla company are instrumental in Bitcoin’s latest rally, noting a filing with the SEC that shows Tesla is going to be buying $1.5 billion worth of Bitcoin as corporate ballast.
As we reported last week, Elon Musk has been very much a market mover across multiple sectors, propping up the wild Gamestop rally and promoting Dogecoin, the Shiba Inu digital asset that has doubled in value recently.
Then there’s Tesla’s own stock, which is still hovering around all-time highs at over $800 per share, an 800% increase within the past year.
Many experts would agree that propelling one’s own company equity to all-time highs is different than spiking someone else’s, and although it’s difficult to condemn Musk for his comments, the resulting impact has some worried.
“There’s an odd irony to Elon Musk’s ability to move the market, while attacking what he sees as unnatural market forces in short-selling,” Dan Lane, an analyst at British trading app Freetrade, told CNBC during coverage of the Gamestop debacle. “It might be that this is finally the time to have a discussion on the legitimacy of the practice.”
But as experienced traders point out, that is easier said than done. There’s a long tradition of a line carved between simple bullish sentiment and market manipulation, which has to involve extraneous factors beyond just mentioning a stock publicly. Otherwise, how could we have Jim Cramer on television?
Look for changes to come to finance – or not – as regulators ponder how to “control” markets that have previously been seen as gloriously independent.
