- Elon Musk may move funds to Bitcoin from interest-charging accounts in Europe.
- BTC up by 10% following Musk’s announcement.
YEREVAN (CoinChapter.com) — Elon Musk deems the below-zero interest rates “insane” as he claims to move funds to Bitcoin. Bulls have pushed the cryptocurrency prices back above $30,000 on the news.
During the so-called ‘B’ Word conference on July 21, Tesla and SpaceX founder Musk raved about negative interest rates in European banks where the companies have deposited holdings. Discouraged by the banks charging to hold cash, he said he might buy BTC with said funds.
Bitcoin a safe haven again?
One might ask why the banks even set these rates that push people to withdraw their holdings. As the global economy struggles to recover from COVID-19 consequences, the European Central Bank creates stimuli to invest rather than save.
According to the S&P Global analysis, however, this is a lose-lose situation for all players of the economy. As for banks, it is pretty straightforward:
“By avoiding interest costs now, they risk losing liquidity-rich customers for the future,”the agency stated.
This liquidity-rich customer is set to transfer the funds to alternative markets, which offer better yields than cash.
Bitcoin, which has lately emerged as a haven against lower-yielding traditional financial instruments, serves as an alternative investment to investors. The flagship cryptocurrency has logged an average annual return of 420% for the past five years.
The Musk Effect
Musk’s statements have always supposedly caused price movements in the Bitcoin, Ethereum, and Dogecoin markets. For example, when Tesla added Bitcoin to its balance sheet back in February, the BTC/USD rates soared to an all-time high. Meanwhile, Musk’s criticism of Bitcoin mining for its alarming carbon footprints led to a significant downtrend in May.
Markets Insider reports, when asked about deliberately stirring the market sentiment, stated:
“I might pump but I don’t dump.”Elon Musk at B Word Conference, July 21
That means that Musk has intentions to pump the crypto prices.
After Musk’s speech yesterday at the conference, BTC recovered from breaking the previously established support of $30K. Now, the price stands at $32,092, at an almost 10% day-on-day increase.
Nevertheless, the 100&200-day MA’s are about to cross, establishing the downslide. The MA cross may cause additional pessimism among short-term investors and induce a new price lump.
Besides moving funds from banks to Bitcoin, Elon Musk confirmed that Tesla and SpaceX hold the digital currency. On top of that, Tesla may start accepting it as payment again.