Bitcoin Prices Surge on Positive Comments
Tesla, Hedge Fund Billionaire Drive Bitcoin Prices Higher
The price of bitcoin (BTC) surpassed $40,000 during trading yesterday due to several factors. Prices were driven higher by bullish commentary from billionaire hedge fund manager Paul Tudor Jones. Additionally, Tesla (TSLA) CEO Elon Musk announced that the company may start accepting the cryptocurrency as payment again.
Ever since May, when Tesla CEO Elon Musk tweeted the company would no longer accept bitcoins as payment, cryptocurrency prices have plummeted. Hundreds of billions of dollars invested in cryptocurrency have been lost. Cryptocurrency prices are notoriously volatile and difficult to predict, but they could be making a comeback.
Tesla May Accept Bitcoin Again
The rise in cryptocurrency prices began Sunday when Musk tweeted that Tesla would resume accepting bitcoins as payment once it can confirm that miners are using 50% clean energy. Mining for crypto requires massive amounts of fuel. Tesla cited this as the reason why it decided to stop accepting bitcoin in the spring.
Tesla is not alone in voicing concerns about the environmental impact of Bitcoin mining. Governments around the world are also taking action. China’s Inner Mongolia region, a hub for Bitcoin mining, wants to put more restrictions on companies and individuals involved in crypto mining. Meanwhile, Iran has a ban on Bitcoin mining from May until mid-September. The country said crypto mining contributed to recent blackouts in Tehran and other large cities.
For a deeper dive, visit How Much Energy Does Mining a Bitcoin Consume?
Crypto Provides a Way to Diversify
Bitcoin’s recent gains were also linked to comments from billionaire hedge fund manager, Paul Tudor Jones. During an interview, the investor said he saw the cryptocurrency as a way to diversify his portfolio, revealing that 5% of his investments are in the digital token. Last spring, Tudor held close to 2% of his assets in bitcoin. With some predictions that inflation will continue beyond 2021, investors have grown more interested in crypto.
Bitcoin has been on a wild ride in recent months, with surges followed by steep declines. With the market seemingly hanging onto every word or Tweet uttered by high-profile backers, investors should be prepared for more tumultuous times ahead.
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