Bitcoin rose in value by more than 10% to $50.6K in midday trading on Wednesday. Today, the digital coin is trading at $49,044.
Last Sunday, bitcoin hit an all-time high, settling at $58,352. Tesla benefited from the jump in BTC's price more than from electric car sales for all of 2020. Approximately a month ago, the company bought $1.5 billion in bitcoin. When the token skyrocketed to a record high, the automaker gained around $1.08 billion.
On the following day, however, the price pulled back by 23% to $44,892. Tesla's founder Elon Musk lost the status of the world's richest men (according to Bloomberg) after the event. His net worth reduced by $15.2 billion as Tesla shares slid 8.6%, their biggest decline since September.
The plunge in the crypto market followed Musk's comments on Twitter where he admitted how unwise it was to invest heavily in bitcoin and called both BTC and Ethereum overvalued assets. Thus, the billionaire acknowledged that investing significantly in bitcoin is not the best solution. It seems that the attitude of large funds and investors towards Tesla made its founder change his opinion on the future of virtual money.
After celebrating the Chinese New Year, large mining consortia entered the market. One of these organizations sold $2 billion worth of bitcoins at the time of the token's peak. In just a few days, the price fell from the all-time high to the local low of $45K.
Later, bitcoin has gotten a boost from good news of the cryptocurrency industry. It became known that the investigation into market manipulation by Tether and Bitfinex has been completed. The crypto market's positive reaction to the news triggered a rise in BTC.
Nevertheless, Tether is still in trouble. Besides, the market has not noticed yet that the company will be required to submit quarterly transparency reports. Therefore, the Department of Justice's decision to stop the investigation seems like a temporary one. Most likely, the department will return to it more than once in the future.
Today, the market is correcting upward. Experts suggest that bitcoin may well correct to the area of $38–43K given a great number of Stop Losses placed by retail traders in the $40–45K region. In case of a rebound from this range and further growth in quotes, the top cryptocurrency is likely to set a new record high.