Telsa billionaire Elon Musk, whose tweets about the meme-based cryptocurrency didgecoin help push it to a $ 10 billion valuation, has warned that the price of bitcoin and ethereum “appears high.”
Bitcoin price is up nearly 500% in the last 12 months, in part due to Musk’s pro-bitcoin and cryptocurrency tweets and his electric car company Tesla adding bitcoin to its balance sheet – following in the footsteps of US software company MicroStrategy
MSTR
Elon Musk, the CEO of both Tesla and SpaceX, has long been known as a cryptocurrency [+]
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Bitcoin’s price soared to $ 57,000 this week, bringing a total value of over $ 1 trillion, while ethereum, the second-largest cryptocurrency, broke $ 2,000 per ether token for the first time, bringing it a total value of $ 226 billion.
Musk made the price warning for bitcoin and ethereum during a discussion on Twitter about the nature of money. Answers to gold investor and bitcoin skeptic Peter Schiff, Musk said: “Money is just data that allows us to avoid the inconvenience of barter. That data, like all data, is subject to latency and error. The system will evolve towards what minimizes both. That said, bitcoin and ethereum seem high. “
Earlier this week, Musk tried to distance himself from Tesla’s $ 1.5 billion bitcoin buy, which pushed the price of bitcoin up sharply when it was revealed.
“Tesla’s action does not directly reflect my opinion,” Musk said via email Twitter following a Bloomberg interview with the CEO of bitcoin and cryptocurrency exchange Binance.
“Having bitcoin, which is just a less stupid form of liquidity than cash, is adventurous enough for an S&P 500 company … If fiat currency has negative real interest, only a fool would look elsewhere. Bitcoin is almost just as bs. as fiat money. The keyword is ‘almost’. “
Bitcoin’s mega rally in 2021 has nearly doubled its price since the beginning of the year thanks to a combination of institutional acceptance by Wall Street, corporate interest and retailers piling up in the market.
“There are a number of reasons why bitcoin is on the rise, but the most striking is the trend that started MicroStrategy and popularized Tesla: moving institutional balances to bitcoin to hedge against inflation,” said Nicholas Pelecanos, chief of trade at blockchain network NEM, said in comments by email.
Bitcoin’s price surge has accelerated in recent weeks, helped by Elon Musk and Tesla.
Coinbase
Ethereum, meanwhile, has benefited from the rise of decentralized finance (DeFi) – by leveraging cryptocurrency technology to recreate traditional financial instruments such as interest, known as “yield” and insurance. Many of the largest DeFi projects are built on top of ethereum’s blockchain, driving ethereum’s price higher as users flood the network.
“We have reached a tipping point where people are questioning traditional monetary systems and recognizing that there are better, fairer options,” said Jai Bifulco, chief commercial officer at blockchain-based precious metal exchange Kinesis, in an email response.
The broad bitcoin and cryptocurrency market, made up of thousands of digital tokens, is now worth a whopping $ 1.7 trillion – up from $ 800 billion in early January.