4 March 2021
Bitcoin hit record highs for a second day running after Elon Musk’s Tesla spoke out, they had bought $1.5bn of the highest value crypto.
In reaction to this news, Bitcoin rose above $48,000 before falling back, but it has maintained its level 25% higher than the previous week.
Some investors took Tesla’s move as a signal that Bitcoin would become a mainstream financial asset, further fueling the price hike.
There was some controversy surrounding the green car company investing in Bitcoin, which requires a significant amount of energy to mine, putting it lightly.
In the coming weeks the price would continue to rise passing $55000. Elon Musk would later tweet that the price was ‘a bit high’ which it can be argued was a significant contribution to a sharp drop in the price. Again, investors found themselves overexposed and there were gut wrenching losses as popular exchanges enforced margin calls on investors who were leveraging too heavily.
Once again we must ask the question of community driven currency, all the advantages of decentralisation are opposed by the value being overwhelmingly driven by public figures & events. Of course, since the huge fall to $3200 in March last year as the reality of the pandemic was beginning to sweep the world, BTC has slowly regrown it’s value, with that growth becoming exponentially faster in recent months and leading to these new record price highs.
More distressing stories of lost passwords came to the fore along with heart warming offers from the hacking community to assist these people in restoring their access to their wallets, for a price of course.
It was not just BTC which benefited from Elon Musk’s influential position either, Dogecoin, a former meme coin, rallied 37% and also hit a record high of $0.08 early in February. We have previously spoke about James Galante’s rallying cry upon Dogecoin which saw it’s volume hit peaks in the summer of 2020, but here in 2021 a much more public figure has pushed investors outside of the TikTok community to give this well known but less respected Crypto a try. Back then, we were astounded to see record high volumes of $1.2Billion and in the previous 24 hours the Market Cap for Dogecoin has been $4.1Billion.
There are many variables to consider beyond just Elon Musk’s public investments. In the UK in 2021, February has been the polar opposite of it’s 2020 counterpart in regards to pandemic news. In 2020, lockdown was coming, shop shelves were beginning to empty as people prepared and the sentiment for any commodity or currency was plummeting, culminating in all time lows in early March. Here in 2021, new promises from the UK government say that we will have a semblance of normal life by mid summer and that we will all be vaccinated come the end of July. With this strong future outlook comes the potential for reasonable investment and as such, prices could continue to grow, with or without the influence of Musk and Tesla.