Bitcoin benefitted from Elon Musk’s Midas touch after the Tesla founder added the cryptocurrency to his Twitter profile, triggering a dramatic rally.
Musk’s page on Twitter simply said #bitcoin with no further explanation, but speculation that the world’s richest man might be a Bitcoin investor was enough to set off a dramatic rally. Prices spiked as much as 15% in a matter of minutes, the biggest intraday move in almost a year.
Bitcoin later pared its gains. The cryptocurrency was up 14% to $37,957 as of 8 a.m. New York time, after jumping as high as $38,089. It reached a record of almost $42,000 on Jan. 8.
“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,” he said.
Musk also tweeted an image of a “Dogue” magazine cover featuring a whippet in a red sweater – a play on the fashion magazine “Vogue.” He also sent posts calling Cyberpunk a great video game and said, “In retrospect, it was inevitable.”
Binance, the world’s largest cryptocurrency exchange by volume, briefly suspended withdrawals on Friday to address a large increase in requests. Chief Executive Officer Changpeng Zhao said that user sign-ups and trades jumped to a record high.
“We almost ran out of DOGE coin addresses,” Zhao told Bloomberg. “Our system couldn’t generate new addresses fast enough to match new users coming in. It’s crazy.”
Coinbase, the largest U.S. digital-asset exchange, said it was investigating delays with deposits and withdrawals.
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 skyrocketed
higher on Friday, jumping about 300% in the last 24 hours to $0.04355, according to CoinMarketCap data.
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, and when someone asked if he owned any Dogecoin, he replied, “No, but maybe one day.”
Cryptocurrency stocks also surged. Marathon Patent Group Inc. and Bit Digital Inc. were up more than 20% in U.S. pre-market trading.