Bitcoin steadies as Elon Musk clarifies comments

Bitcoin steadied after Elon Musk said Tesla hasn't sold from its holdings of the token, clarifying earlier comments that seemed to imply the electric vehicle maker may sell or has sold its stake.

The largest digital currency was at $44,900 as of 7.21am in London on Monday, after Musk in a tweet said: “To clarify speculation, Tesla has not sold any Bitcoin.” Earlier, the token slid to $42,185, the lowest since February. It’s about $20,000 off the record set in April.

Tesla CEO Musk spent the past couple of days duelling on Twitter with critics of his move to suspend acceptance of Bitcoin payments on environmental concerns.

On Sunday, the mercurial billionaire seemed to agree with a post saying the electric-vehicle maker should divest what at one point was a $1.5 billion Bitcoin stake. The saga added to a souring mood around cryptos in general amid a pullback in other coins like Ether and Dogecoin.

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Musk appears to have been “taking on all comers on Twitter over the weekend and caused some chunky gyrations across the coins,” Chris Weston, head of research at Pepperstone Group, wrote in a note.

Musk’s disclosure in early February that Tesla had invested $1.5 billion in corporate cash to buy Bitcoin sent the token’s price to a record and lent legitimacy to virtual currencies, which have come closer to being a more mainstream asset in recent months despite lingering scepticism.

But in the past week his online commentary shook the crypto faithful even as Musk reiterated his support for digital currencies overall.

He lopped nearly $10,000 off the price of Bitcoin in hours last Wednesday after saying Tesla would no longer accept it as payment for cars. In the same statement, the tycoon said the firm wouldn’t be selling its holdings.

A few days earlier, Musk had hosted “Saturday Night Live” and joked that Dogecoin – a token he had previously promoted – was a “hustle,” denting its price. Days later he tweeted he was working with Doge developers to improve its transaction efficiency.

Bitcoin was already falling on Sunday when Musk replied “Indeed” to a tweet from @CryptoWhale suggesting Tesla get rid of its remaining Bitcoin holdings. His reply exacerbated the decline.

Responding to another thread criticising his Bitcoin stance, Musk said: “Obnoxious threads like this make me want to go all in on Doge.”

Some observers have cautioned that the cryptocurrency sector was ripe for a pullback anyway after giant gains over the past year.

Bitcoin, for instance, is still sitting on a more than fourfold advance over the period. Ether, the second-largest token, is up more than 1,500 per cent and Dogecoin over 19,000 per cent. – Bloomberg