Bitcoin climbs past $40,000 following Tudor Jones’ endorsement; Musk reverses on accepting cryptocurrency

Hello and welcome to the latest issue of Overbit News. In this issue, we will cover Bitcoin market sentiment on a macro level. This week, Bitcoin’s price jumped over $40,000 on Monday after billionaire hedge fund manager Paul Tudor Jones made bullish comments.

Tudor Jones said on CNBC’s “Squawk Box” on Monday. “I like Bitcoin as a portfolio diversifier. Everybody asks me what should I do with my Bitcoin? The only thing I know for certain, I want 5% in gold, 5% in Bitcoin, 5% in cash, 5% in commodities,” The cryptocurrency experienced its most recent jump on Sunday, after Tesla CEO Elon Musk stated that the electric vehicle manufacturer might resume accepting Bitcoin transactions in the future.

After beginning the day at $34,880, Bitcoin surpassed $40,000 early Monday. According to Coinbase, the cryptocurrency remained off the day’s highs as of the latest trade, but it was still up 5.4 per cent in 24 hours to $39,749, according to the latest close. Bitcoin has increased by more than 30 per cent since the beginning of the year, despite dramatic swings.

It reached an all-time high of $64,829.14 in April and a low of roughly $30,000 in May after a 30% intraday drop. With inflation predicted to climb this year, institutional investors’ interest in Bitcoin as a store of value has increased dramatically, fuelling its most recent bull run.

Tudor Jones initially revealed on CNBC last spring that he had “nearly 2%” of his assets in Bitcoin. Since then, Stanley Druckenmiller, Bill Miller, and Ray Dalio have become more vocal Bitcoin supporters.

Organizations rode that wave, with large custodian banks like BNY Mellon and State Street attempting to provide crypto services to clients and large financial institutions like BlackRock, Morgan Stanley, and Goldman Sachs figuring out how to offer clients exposure to Bitcoin in a safe manner.

Previously, there was significant career danger for investing firms attempting to include Bitcoin into their portfolios. “For me, it’s just a way of kind of foundationally looking at how do I protect my wealth over time; it’s a great diversifier,” Tudor Jones added.

Bitcoin gained another $700 shortly after the investor’s remarks. The weekend gains followed Musk’s announcement on Sunday that Tesla will restart accepting Bitcoin transactions “when there’s confirmation of reasonable (~50%) clean energy usage by miners with the positive future trend.”

Tesla halted Bitcoin car purchases in mid-May, citing worries about the environmental impact of cryptocurrency mining. Tudor Jones also expressed concern about Bitcoin’s ecological effects on Monday.

Crypto mining necessitates large quantities of energy to operate powerful computers – according to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin mining consumes more power than entire countries such as Finland and Belgium. The recent occurrence is another example of significant market movements in response to comments made by Tesla CEO and billionaire Elon Musk.

Hundreds of billions of dollars were wiped out of the cryptocurrency market after Musk said in May that Tesla would no longer accept Bitcoin payments for automobile purchases. Musk’s previous tweets have also been tied to stock market movements, ranging from so-called meme stocks like GameStop to the investor of viral song “Baby Shark.”

The environmental impact of Bitcoin mining has received much attention. As part of its Bitcoin crackdown, China’s Inner Mongolia area — a significant Bitcoin mining hotspot — recommended penalties for organizations and individuals involved in digital currency mining in late May.

It came after Chinese Vice Premier Liu He said it is necessary to “crackdown on Bitcoin mining and trading behaviour” to prevent the “transmission of individual risks to the social field.”

Wrapping up, in other news, Iran’s government declared in May a ban on mining Bitcoin and other cryptocurrencies until September 22, citing blackouts in the country’s capital of Tehran and several other major cities caused in part by the energy-intensive activity.

As you can see, institutional investors and the government are battling for the future of Bitcoin, and the best thing to do right now is to be patient as this all plays out.

Thanks for reading, and we’ll see you next week!

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