What’s Behind the Latest BTC Bump?

Over the weekend, BTC jumped over US$39,000 after Elon Musk declared that Tesla (-0.04%) would accept the cryptocurrency again when BTC mining was done with more clean energy.

In a tweet, the CEO of Tesla, Musk, said that the electric vehicle maker would allow BTC transactions again “when there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend.”

The latest tweet from Musk comes in response to allegations by Magda Wierzycka, Executive Chair of South African asset manager Sygnia, that Musk’s recent tweets on BTC should have prompted an investigation by the U.S. Securities and Exchange Commission.

Musk has always been the “BTC whale” that has been hiding in plain sight, and some of his tweets could potentially be seen as manipulating the price of BTC.

The Tesla CEO has seemingly enjoyed his significant influence and appears to have delighted in whipsawing BTC and other digital tokens like Dogecoin in the past few months.

In February, Tesla announced it had bought US$1.5 billion in BTC and in March, Musk tweeted, “you can now buy a Tesla with BTC,” fueling an incredible rally for BTC which saw it top off around its all-time-high of about US$64,000.

During this period, Tesla sold around 10% of its BTC stake, raking in a profit of over US$100 million.

But less than a month later, Musk sent BTC plummeting, alleging that Tesla would no longer be accepting BTC due to concerns about fossil-fuel usage for BTC mining and transactions.

Musk’s relentless tweets have had considerable material impact on BTC’s price, moves that had BTC’s legal status been clearer, ought to have attracted if not an investigation, then at least an inquiry by the U.S. Securities and Exchange Commission, especially if it can be shown to have had material impact on Tesla’s share price.

And the latest tweet which appears to be embracing BTC again (provided that it’s more environmentally friendly) could even be a pretext to boost Tesla’s Solar Roof business, which could apply that solar power to run BTC mining facilities.

The bullish upturn for BTC comes on the back of several developments over the weekend, including a crucial consensus on upgrades to the BTC blockchain that could raise the stakes for ETH, currently the world’s second most valuable and arguably more versatile blockchain.

BTC’s Taproot upgrade, the most anticipated since 2017, is said to now have sufficient support from BTC miners to lock in activation.

Taproot will adjust BTC’s core code that allows for possibly heightened levels of privacy, multi-signature wallets and security and improvements for scaling and speeding up the BTC blockchain.

MicroStrategy last week boosted a junk-bond offering to buy more BTC from US$400 million to US$500 million.