Good morning, and welcome to our continued coverage of the world economy, financial markets, the eurozone and business.
Bitcoin is on a wild ride today when Tesla CEO Elon Musk set off an alarm that the electric vehicle maker could sell its stakes – before clarifying that it did not sell any bitcoin.
The drama started last night on Twitter (of course), when an account called @CryptoWhale tweeted:
“Bitcoiners are going to slap each other next quarter when they find out that Tesla has disposed of the rest of its assets. With the amount of hate @elonmusk it’s getting, I wouldn’t blame you … ”
Musk (which last week suspended plans to allow Tesla customers to pay in bitcoin) answered:
Bitcoin had already weakened last week, following Musk’s criticisms of its high energy use and environmental impact.
And Musk’s one-word response last night caused bitcoin to fall to its lowest level since February, when fear swept the cryptographic world that Tesla could have already sold their participation (although Musk said last week that Tesla will not sell any bitcoin).
Dropped to $ 42,212.56, Show Coindesk data – and even more from the record highs of $ 64,000 seen in April.
But … Musk has now returned to Twitter and declared that:
To clarify speculation, Tesla did not sell any Bitcoin.
This brought bitcoin back to around $ 44,500 in volatile trades – still falling by around 10%, and the weakest since the end of February.
Musk’s ability and willingness to change cryptocurrency prices with a single tweet may dissuade other companies from following Tesla’s lead and putting bitcoin on their balance sheets.
Kyle Rodda in IG explains that the episode is slowing the movement of bitcoin towards the mainstream:
In an exchange on a Twitter topic, mercurial Mr. Musk hinted that Tesla, having reversed its decision to accept Bitcoin as a form of payment, can “in fact” unload its assets from the Treasury.
The speculation apparently prompted traders to try to anticipate Tesla’s potential move, as the momentum behind Bitcoin’s popularization slows down a little more.
Naeem Aslam, analyst at Think Markets, says “Elon” was the dominant word in the crypto market over the weekend. But, he adds that bitcoin was already shifting downwards – and could have fallen further …
It is important to keep in mind that it is true that the current settlement in the price of Bitcoin is mainly due to Elon Musk. But the reality is that Bitcoin lost its upward momentum a long time ago, and that’s because all the positive news about Bitcoin has failed to raise Bitcoin prices.
It was clear that Bitcoin prices went too far, and a correction was needed. This correction is taking place now, and we are likely to see Bitcoin’s price drop further. Short-term support for Bitcoin is close to the 38K price level.
Also coming today
European stock markets opened slightly higher, as concerns about the Indian variant of Covid-19 increase in the United Kingdom and restrictions on coronavirus decrease further in England, Wales and much of Scotland.
A survey of factories in the New York area and a new check by American construction companies will show how America’s economy is doing this month.
In the UK, ONS is publishing a new report on ‘Management, Work at Home and Productivity Practices’ during the pandemic.
A big business is taking shape in the media space, with US telecoms giant AT&T reportedly making a deal to combine its WarnerMedia unit – which includes CNN and HBO – with rival Discovery.
- 9:30 am BST: UK National Bureau of Statistics report on work at home in the pandemic
- 1:30 pm BST: New York Empire State Manufacturing Index for May
- 3 pm BST: US housing market NAHB index for May