Elon Musk's recently-sparked Bitcoin rally has almost evaporated

A jump in the price of Bitcoin sparked last week by Elon Musk’s Twitter profile had largely unwound by Monday.

Musk recently caused an overload on secure messaging app Signal's servers, after tweeting “Use Signal” following WhatApp's latest privacy controversy. (REUTERS)

A jump in the price of Bitcoin sparked last week by Elon Musk's Twitter profile had largely unwound by Monday.

The cryptocurrency surged as much as 16% Friday, touching $38,627, after Musk changed his Twitter profile to “#bitcoin.” While the reference was still visible Monday, Bitcoin was back at around $33,600 as of 2 p.m. in Tokyo.

Cryptocurrencies have been buffeted recently by volatile retail-investor demand shaped online in Twitter feeds and Reddit forums. Dogecoin -- a Shiba Inu-themed digital coin that started as a joke -- rallied into the top 10 cryptocurrencies by market value last week before plunging over the weekend.

Bitcoin has shed about $8,000 since reaching an all-time high of almost $42,000 in early January but remains up more than 250% in the past year.

Some argue Bitcoin is winning a wider investor base because it's muscling in on gold as a hedge for risks such as dollar weakness or faster inflation. Others see a precarious rally propelled largely by speculation atop a tide of stimulus.

The digital asset could be due for a “drawdown” because its price ascent is “steeper than any other financial innovation or asset bubble of the past 50 years,” John Normand, a strategist at JPMorgan Chase & Co., wrote in a note Friday. 

Musk and his tweets are popular on the microblogging site, regularly ‘disrupting' the markets with a few words or a change to his profile.  He recently caused an overload on secure messaging app Signal's servers, after tweeting “Use Signal” following WhatApp's latest privacy controversy.  

Bitcoin rose 3% to $33,560 as of 2 p.m. in Tokyo on Monday. The wider Bloomberg Galaxy Crypto Index, which includes Bitcoin and second-ranked Ether, dipped 2%. 

 

- With inputs from HT Correspondent