Telsa billionaire Elon Musk, whose tweets about the meme-based cryptocurrency dogecoin helped bring it to a valuation of $ 10 billion, warned that the price of bitcoin and ethereum “looks high.”
The price of bitcoin has risen nearly 500% in the last 12 months, in part due to Musk’s pro-bitcoin and cryptocurrency tweets as his electric car company Tesla added bitcoin to its balance sheet, following in the company’s footsteps. American MicroStrategy software.
The price of bitcoin surged to $ 57,000 this week, giving it a total value of more than $ 1 trillion, while ethereum, the second largest cryptocurrency, broke $ 2,000 per ether token for the first time, giving it a total value of $ 226 billion.
Musk made the bitcoin and ethereum price warning during a Twitter discussion about the nature of money. In response to gold investor and bitcoin skeptic Peter Schiff, Musk saying: “Money is just data that allows us to avoid the downsides of bartering. 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 purchase, which pushed up the price of bitcoin considerably when it was revealed.
“Tesla’s stock does not directly reflect my opinion,” Musk said via Twitter in response to a Bloomberg interview with the CEO of Binance, the bitcoin and cryptocurrency exchange.
“Having some bitcoin, which is simply a less silly form of liquidity than cash, is adventurous enough for an S&P 500 company … When fiat currency has negative real interest, only a fool would not look elsewhere. . Bitcoin is almost as bs “as fiat money. The key word is ‘almost’ “.
Bitcoin’s mega rally in 2021 has seen its price nearly double since the beginning of the year thanks to a combination of institutional Wall Street adoption, corporate interest, and retail traders piling up in the market.
“There are a number of reasons why bitcoin is skyrocketing, but what stands out the most is the trend that MicroStrategy started and Tesla popularized: moving institutional balance sheets to bitcoin to hedge against inflation,” Nicholas Pelecanos, Chief Operating Officer, blockchain network NEM said in the emailed comments.
Ethereum, meanwhile, has benefited from the rise of decentralized finance (DeFi), using cryptocurrency technology to recreate traditional financial instruments like interest, known as “yield,” and insurance. Many of the largest DeFi projects are built on top of the ethereum blockchain, increasing the price of ethereum as users flood the network.
“We have reached a tipping point where people are questioning traditional monetary systems and recognizing that there are better and fairer options,” said Jai Bifulco, chief commercial officer of Kinesis, the blockchain-based precious metals exchange, in comments. sent by email.
The vast market for bitcoin and cryptocurrency, made up of thousands of digital tokens, is now worth a staggering $ 1.7 trillion, up from $ 800 billion in early January.