Bitcoin’s price surged after Tesla CEO Elon Musk said Sunday the electric vehicle maker could accept bitcoin transactions again in future.
The cryptocurrency then took another leg higher above $40,000 on bullish comments by legendary investor Paul Tudor Jones.
Bitcoin jumped 12.5% to $40,178 in 24 hours, according to Coinbase. The cryptocurrency started Sunday trading at just $34,880. Since the start of the year, bitcoin has surged more than 30%, though it has experienced wild swings. It hit an all-time high of $64,829.14 in April and hit a low near $30,000 in May following a 30% intraday crash.
“I like bitcoin as a portfolio diversifier. Everybody asks me what should I do with my bitcoin? The only thing I know for certain, I want 5% in gold, 5% in bitcoin, 5% in cash, 5% in commodities,” Tudor Jones said on CNBC’s “Squawk Box” on Monday.
“For me, it’s just a way of kind of foundationally looking at how do I protect my wealth over time it’s a great diversifier again, I look at bitcoin as a story of wealth,” Jones added. “I look at crypto as a story of wealth. Others will argue this is a different ecosystem. It’s transactional in nature.”
Bitcoin went up about another $700 shortly after the investor’s comments.
The weekend gains came after Musk said Sunday that Tesla will resume allowing bitcoin transactions “when there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend.”
Tesla halted car purchases with bitcoin in mid-May, citing concerns over the climate impact of cryptocurrency mining.
Crypto mining requires massive amounts of energy to fuel powerful computers — bitcoin mining consumes more energy than entire countries such as Finland and Belgium, according to the Cambridge Bitcoin Electricity Consumption Index.
The latest development marks yet another example of large market moves following comments by the Tesla CEO and billionaire.
Hundreds of billions of dollars were wiped off the cryptocurrency market after Musk tweeted in May about Tesla’s suspension of car purchases using bitcoin. Musk’s past tweets have also been linked to moves in the stock market — ranging from so-called meme stocks such as GameStop, to the investor of viral song “Baby Shark.”
Bitcoin under environmental spotlight
The environmental impact of bitcoin mining has come under intense scrutiny.
As part of its crackdown on bitcoin, China’s Inner Mongolia region — a major bitcoin mining hub — in late-May proposed punishments for companies and individuals involved in digital currency mining. It came after Chinese Vice Premier Liu He said it is necessary to “crack down on Bitcoin mining and trading behavior” to prevent the “transmission of individual risks to the social field.”
Elsewhere, Iran’s government in announced in May a ban on the mining of bitcoin and other cryptocurrencies until Sept. 22, after officials said blackouts in the country’s capital of Tehran and several other large cities were in part due to the energy-intensive activity.
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Originally Published On: CNBC
Photo courtesy of: CNBC
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