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Bitcoin climbs near US$40,000 after Musk says Tesla could use it again

Bitcoin climbs near US$40,000 after Musk says Tesla could use it again

A representation of the virtual cryptocurrency Bitcoin is seen in this picture illustration taken on Jun 14, 2021. (Illustration: Reuters/Edgar Su)

LONDON: Bitcoin climbed to shy of US$40,000 on Monday (Jun 14), after yet another weekend of price swings following tweets from Tesla boss Elon Musk, who fended off criticism over his market influence and said Tesla sold bitcoin but may resume transactions using it.

Bitcoin has gyrated to Musk's views for months since Tesla announced a US$1.5 billion bitcoin purchase in February and said it would take the cryptocurrency in payment. He later said the electric car maker would not accept bitcoin due to concerns over how mining the currency requires high energy use and contributes to climate change.

"When there's confirmation of reasonable (~50 per cent) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions," Musk said on Twitter on Sunday.

Bitcoin rallied more than 9 per cent after that message, breaking above its 20-day moving average, and climbed further in Asia to hit US$39,838.92.

"Musk's words caused bitcoin to surge," said Simon Peters, market analyst at eToro.

It was last up 0.5 per cent at US$39,189, straining to escape the relatively tight trading range of this month.

READ: China arrests 1,100 suspects in crackdown on crypto-related money laundering

The market was also supported by software company and major bitcoin-backer MicroStrategy raising half a billion dollars to buy bitcoin, said Bobby Ong, co-founder of crypto analytics website CoinGecko.

Bitcoin is up about a third this year but has collapsed from a record peak above US$60,000 amid a regulatory crackdown in China and Musk's apparently wavering enthusiasm for it. Telsa stock is down about 30 per cent since the company's bitcoin purchase.

Musk's tweet was made in response to an article based on remarks from Magda Wierzycka, head of cybersecurity firm Syngia , who in a radio interview last week accused him of "price manipulation" and selling a "big part" of his exposure.

"This is inaccurate," Musk said. "Tesla only sold ~10 per cent of holdings to confirm BTC could be liquidated easily without moving market."

Musk had tweeted in May that Tesla "will not be selling any bitcoin" and "has not sold any bitcoin", but investors are keenly awaiting Tesla's next earnings update - due next month - for any disclosure of changes to its position.

Musk has taken issue with the vast computing power required to process bitcoin transactions and in early June posted messages appearing to lament a breakup with bitcoin. 

Source: Reuters/lk

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