Bitcoin rallied above $47,000
How did this happen?
Yesterday, US SEC published the annual report of Tesla. The file states that Tesla has “invested an aggregate $1.50 billion in Bitcoin under this policy and may acquire and hold digital assets from time to time or long-term”.
The report also mentions “accepting Bitcoin as a form of payment for our products in the near future.”
As a consequence, Bitcoin price has increased by $4,000 in 1 hour since the news. At the moment of publishing this article, the price has been around $45,000 for 1 BTC.
This Bitcoin rally has been developing ever since Elon Musk promoted Dogecoin on his Twitter. While Elon has enjoyed joking about Dogecoin, there have been clues about Bitcoin adoption all along.
First, Elon has made a comment that he wouldn’t mind being paid in Bitcoin. Then, he changed his Twitter bio to #bitcoin. Finally, in the Clubhouse app interview, Elon has revealed to be “a supporter of bitcoin”.
Do other companies plan to join the rally?
Yes. Elon Musk has paved the way for the mainstream company adoption of Bitcoin. However, he hasn’t done as much work as Michael Saylor did, the CEO of MicroStrategy. Michael has organized a “Bitcoin for Corporations” event, explaining how to invest in Bitcoin for corporations. The event has attracted 8,197 attendees from 6,917 different enterprises.
Will this price last?
Recent investments by companies drive the current price. According to Cryptoquant, $500 million of Bitcoin has been transferred from crypto exchange Coinbase. This event is a part of a larger trend – crypto exchanges lose the supply of Bitcoin. Cryptoquant’s CEO speculates this may be a series of corporation investments. Regardless of who’s buying BTC, the available supply shrinks. As any asset becomes harder to buy, its price inevitably increases.
Technical indicators show a different forecast. MarketMilk’s analytical tools suggest that Bitcoin is overbought. When an asset is overbought, a downsize price correction follows. Although it’s important to understand that this technical analysis relies on historical data.