Musk enjoying the spotlight

Thankfully, Elon Musk on Monday once again ensured no one would be bored, with the unexpected announcement that Tesla will buy bitcoin and accept them as payment for vehicles.

The latter may be more of a publicity stunt than anything. I mean, who in their right mind is spending bitcoin? Let alone on a car. But it very much complements its decision to spend USD1 .5 billion on bitcoins. You’re either onboard or not and Tesla is very much saying it is. As long as not too many take them up on their decision to transact in the virtual currency, I imagine.

All of this will certainly make the crypto space a more dominant feature in the months ahead though, as traders wait in anticipation of who will join Musk in jumping aboard the bitcoin train and with how much company money behind them. I imagine there won’t be many, but even a small number of high profile, well funded, names could push bitcoin towards six-figure territory.

That seems ridiculous but the money will follow even if no one is actually transacting because everyone wants to be part of the movement, especially if that movement is upward and is making them lots of money, rapidly. Whether the reality will catch up, time will tell, but it’s an interesting story and one that isn’t going away any time soon, it seems.

How long until USD 50,000?

Picking out technical levels can feel almost pointless at the best of times for bitcoin, given the level of volatility we can so often see. But when Elon Musk is tweeting and backing it up with Tesla’s money, it just becomes a bit of a guessing game. One thing is clear, it has received renewed momentum with yesterday’s announcement and USD50,000 would be a big psychological achievement.

Whether other leaders and companies share Musk and Tesla’s appetite for risk, I’m not sure. But this could keep things interesting in the near-term and suddenly, Musk has become the most influential person in the cryptoverse. To the moon we go.

For a look at all of today’s economic events, check out our economic calendar.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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