Bitcoin witnessed a sudden double-digit spike on Friday, jumping to $37,050 — its highest level since Jan. 19. The 15.7% rise happened in less than 15 minutes and more than reversed the early dip from $34,400 to $32,000.
While the exact reason for the bullish move is unclear. Many have speculated that the prices surged after Tesla and SpaceX CEO Elon Musk updated his Twitter bio to mention the leading cryptocurrency.
Around the time he added the Bitcoin hashtag to his bio, Musk also cryptically tweeted, “In retrospect, it was inevitable”. The mere possibility of the world’s richest man being a Bitcoin investor was enough to set off the dramatic rally.
Bitcoin pared gains later in the London trading day. The priced increased 11% to $37,088 as of 11:29 a.m. local time, after jumping as high as $38,089.
“Obviously this huge melt-up is due to Elon’s tweet,” said Antoni Trenchev, managing partner and co-founder of Nexo in London. Which bills itself as the world’s biggest crypto lender.
“Musk’s support for Bitcoin “creates a safe zone for some of the smaller companies and possibly everyone in the S&P 500 to allocate into Bitcoin.”
Musk also tweeted an image of a “Dogue” magazine cover featuring a whippet in a red sweater — a play on the fashion magazine “Vogue.”
Traders trying to read between the lines of Musk’s tweets interpreted his cryptic messages as support for Bitcoin and Dogecoin, a digital coin originally created as a joke. Dogecoin prices skyrocked higher on Friday, jumping about 300% in the last 24 hours to $0.04355, according to CoinMarketCap data.
Not The First Time Elon Musk Has Mentioned Bitcoin
It’s not the first time Musk has hinted at crypto assets. Earlier this month, he agreed with a post referencing being paid in Bitcoin. When someone asked if he owned any Dogecoin, he replied, “No, but maybe one day.”
It’s currently unknown if Bitcoin will continue its uptrend, but Blockchain analytics firm CryptoQuant’s “Exchange Whale Ratio” may offer some clues.
The metric, which is calculated by dividing the top 10 Bitcoin inflow transactions in an hour by total exchange inflows, jumped to an eight-month high of 0.88 early Friday, warning of a possible price drop.
However, CryptoQuant CEO Ki-Young Ju noted that “Elon’s tweet overrides all other bearish signals”. A reflection of Musk’s huge social media influence, Google searches for “Bitcoin” skyrocketed following his bio change.