Wednesday, June 23, 2021

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Bitcoin’s continued its recent slide after a tweet from

Tesla Inc.

TSLA -3.84%

Chief Executive

Elon Musk

prompted speculation that the electric-car maker had sold, or would sell, its holdings of the cryptocurrency.

While Mr. Musk later tweeted that Tesla hadn’t sold any bitcoin, the selloff demonstrated his power to shift cryptocurrency markets. Last week, he said Tesla had suspended accepting bitcoin as payment for its vehicles, citing concerns over its carbon footprint. Since then, the market value of bitcoin has fallen to about $815 billion from more than $1 trillion.

Bitcoin traded as low as $42,102.35 overnight—its lowest level since February—and was recently hovering around $42,950. It is down about 35% from its record approaching $65,000 a month ago.

Mr. Musk’s recent posts on

Twitter

have shown that his sentiments are having a significant impact on the market, said Chris Bendiksen, head of research at London-based asset management firm CoinShares.

“It’s a little too much for my liking,” he said.

The attention on bitcoin from Elon Musk likely helped usher new individual investors to buy it.



Photo:

Liesa Johannssen-Koppitz/Bloomberg News

The Tesla chief has long been a prolific tweeter regarding cryptocurrencies, sharing memes and posts about the joke cryptocurrency dogecoin. Earlier this year, Tesla said it added $1.5 billion worth of bitcoin to its corporate treasury. The company sold $272 million worth of bitcoin in the first quarter, helping it report record earnings.

The attention on bitcoin from Mr. Musk likely helped usher new individual investors to buy it, investors and analysts say. Those traders might be more likely to sell based on Mr. Musk’s tweets, increasing volatility.

The price of bitcoin is skyrocketing, driving a rally of momentum trading that’s pushed its value higher than it’s ever been before. WSJ explains how bitcoin trading works, and why the volatile digital currency is reaching all-time highs. Illustration: Jacob Reynolds/WSJ (Video from 12/21/20)

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8



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