Elon Musk’s Tesla is up $1 billion on its $1.5 billion bitcoin investment as the cryptocurrency soars

Elon Musk
Elon Musk

  • The bitcoin bought by Tesla for $1.5 billion in January is worth $2.5 billion after bitcoin’s rally.
  • The token topped $60,000 briefly because the SEC looks likely to approve bitcoin futures ETFs.
  • Tesla CEO Elon Musk is influential in crypto and his comments have driven volatility in bitcoin’s price.
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Elon Musk’s vow that Tesla will hold onto its billion-dollar-plus investment in bitcoin is paying off as ETF excitement drives the coin’s price to highs not seen since April.

The electric-car maker now holds 42,902 bitcoin, according to Bitcoin Treasuries. It added $1.5 billion worth of the cryptocurrency to its balance sheet in February.

That investment is valued at $2.5 billion on Friday, after bitcoin climbed more than 3%, according to Coinbase data. The price of the token touched $60,000 but has since slipped back to $59,310 – still its highest level in five months.

This is not the first time Tesla’s holding has added $1 billion in worth. Its fair value was almost $2.5 billion in March, the company said in an SEC filing. Overall, the value of Tesla’s crypto investment has tracked the price moves for bitcoin since February.

The token has gained 23% over the past month on hopes the SEC will give the go-ahead for crypto exchange-traded funds. A report Friday that regulators are ready to allow bitcoin futures ETFs to trade next week has boosted the price.

Tesla has sold only 10% of its bitcoin, and that was only to find out whether it was as liquid as cash on a balance sheet, Musk said.

“Tesla will not be selling any bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy,” its CEO Musk said in a tweet in May.

Musk is a crypto influencer whose comments have contributed to volatility in the price of dogecoin and shiba inu as well as bitcoin. The comment indicating Tesla had suspended vehicle purchases in bitcoin was followed by a drop in the token’s price.

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Cathie Wood’s Ark Invest gets behind a bitcoin futures ETF, stepping up its crypto involvement

Cathie Wood
Cathie Wood is the founder, CEO, and CIO of ARK Investment Management.

  • Cathie Wood’s Ark has put its name to a bitcoin futures ETF, an SEC filing Wednesday shows.
  • The ARK 21Shares Bitcoin Futures Strategy ETF was filed by issuer Alpha Architect and lists 21Shares as investment sub-adviser.
  • The filing assigns the ticker ARKA – a positive sign of coming SEC approval, according to an analyst.
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Cathie Wood’s Ark Invest just took a step further into crypto by putting its name to a bitcoin futures exchange-traded fund filed to the SEC Wednesday.

The ARK 21Shares Bitcoin Futures Strategy ETF will carry the ticker ARKA, according to the filing by ETF issuer Alpha Architect. Crypto firm 21Shares – part of Wood-backed Amun Holdings – is listed as a sub-adviser.

Ark Investment Management will provide marketing support, the filing said.

This is not the first time Cathie Wood has dived into the crypto ETF space. One of Ark’s funds gave itself clearance to buy Canadian bitcoin exchange-traded funds in late September. Bitcoin bull Wood has praised the cryptocurrency as a hedge against inflation.

The fact that the Ark-backed ETF has an assigned ticker is an indication the SEC could move soon on getting the green light for launch, according to Eric Balchunas, a senior ETF analyst at Bloomberg.

“ARK just filed for a bitcoin futures ETF via 21Shares and via whiteAlpha Architect white label (huge win for them). Already has ticker too: $ARKA (yet another good sign SEC gonna approve),” he posted to Twitter Wednesday.

With its involvement, Ark joins a queue of more than a dozen Wall Street players hoping to get approval for a crypto-focused ETF from US regulators. Four may get a green light before the end of the month, according to Bloomberg. These are ProShares Bitcoin Strategy ETF, Invesco Bitcoin Strategy ETF, VanEck Bitcoin Strategy ETF, and Valkyrie Bitcoin Strategy ETF.

Last week, the SEC approved Volt Equity’s exchange-traded fund, which is made up of stocks with bitcoin exposure such as mining companies. It’s seen as the closest to a bitcoin ETF to get clearance.

The prospect of a bitcoin ETF has spurred the bitcoin price back above $50,000, and pushed its market capitalization to return to top $1 trillion. Last week investors poured $225 million into assets backed by bitcoin, the most in seven months, because of the positive ETF outlook, according to CoinShares.

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Investors poured the most cash into bitcoin in 7 months last week, when ‘buy the dip’ lifted the price above $50,000: CoinShares

Purple and gold bitcoin
Purple and gold bitcoin

  • Assets backed by bitcoin saw $225 million in inflows over the week to October 8, according to CoinShares.
  • Bitcoin soared above $50,000 in that period thanks to dip buyers and the SEC’s potential approval of a related ETF.
  • Ether-backed products logged $13.6 million in outflows, the most since June 25.
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Investors poured the most cash into bitcoin-backed products in seven months as the cryptocurrency rallied past $50,000 last week, according to a report from CoinShares on Monday.

Assets backed by bitcoin logged $225 million in inflows in the week to October 9, the most since the week of February 26, the report showed. The leading cryptocurrency made up almost all the total $226 million inflows into digital asset management products, CoinShares noted.

Ether-backed assets saw outflows of $13.6 million, the most since the week to June 25, compared with $20.2 million worth of inflows the previous week.

Over that timeframe, bitcoin rose by around 15% to top the psychologically important $50,000 level, spurred on by people buying into a dip below $40,000 in late September. Investors may also be bullish after signs the US Securities and Exchange Commission may be open to a bitcoin exchange-traded fund.

“We believe the turnaround in sentiment towards bitcoin is due to constructive statements from SEC Chair Gary Gensler, potentially allowing a bitcoin ETF in the US. Our recent survey data also highlights greater institutional participation in the asset class,” CoinShares said in the report.

Last week, the SEC approved Volt Equity’s exchange-traded fund, which is made up of stocks with bitcoin exposure, such as bitcoin miners. It is seen as the closest the regulator has got to giving the green light for the 13 bitcoin ETFs it has under review.

Among altcoins, solana-backed assets logged inflows totalling $12.5 million and cardano-backed assets had inflows worth $3 million.

But at the same time, cash flowed out of assets backed by polkadot’s dot, with $2.1 million in outflows. XRP-based products saw $600,000 of outflows, while litecoin booked $200,000 of outflows.

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Crypto miner Riot Blockchain has tripled its bitcoin production in a year – and is sitting on more than $190 million in coins

Mining machines
Mining machines

  • Crypto miner Riot Blockchain said this week it had mined 346% more bitcoin in September this year than last year.
  • The company said it currently holds 3,534 bitcoin from its mining operations – roughly $190 million in coins.
  • Mining companies “hoarding bitcoin is a game changer,” Michael Saylor, CEO of MicroStrategy said in a tweet.
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Crypto miner Riot Blockchain tripled its production of bitcoin in September, as demand for all things digital continued to flourish, and is building up a sizeable reserve of coins itself, according to a company press release earlier this week.

The company mined 406 bitcoin in September, marking a 346% increase compared with the same month a year ago. Year to date, the company has produced 2,457 bitcoin, a rise of 236% over the same period last year.

The company, which is publicly listed, said it now holds 3,534 bitcoin – worth around $190.7 million at the current price of roughly $55,000 – but did not say why it was storing them.

Michael Saylor, the CEO of data platform MicroStrategy, which has invested heavily in bitcoin, said the decision was significant in a tweet on Tuesday.

“In September, @RiotBlockchain mined 406 BTC, sold none of its production, and ended the month with 3,534 BTC on its balance sheet. Publicly traded Bitcoin miners aren’t selling bitcoin, they are accumulating bitcoin. The game has changed,” Saylor tweeted.

Crypto mining is the process where coins like bitcoin are extracted from their blockchains through solving complex mathematical problems that require intense computing power and high levels of energy.

Since the recent exodus of miners from China, which has been steadily clamping down on all aspects of crypto production and ownership, mining activity has increased elsewhere. Riot said it currently has a fleet of around 25,646 mining machines, and said it plans to increase this to more than 27,000 by November.

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Morgan Stanley doubled down on its bitcoin exposure by buying into the Grayscale Trust: filing

Bitcoin
Bitcoin

  • A Morgan Stanley fund owned 58,116 Grayscale shares worth $2.018 million by July 31, according to a SEC filing Monday.
  • In April, the same fund owned 28,298 shares worth $1.3 million.
  • “I like the idea here that you can bet small, win big,” Morgan Stanley’s Dennis Lynch said on crypto last week.
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Investment bank Morgan Stanley has been gradually ramping up its involvement in the cryptocurrency market this year, and recently doubled down on its bitcoin exposure via the Grayscale Bitcoin Trust (GBTC), according to a SEC filing Monday.

The Morgan Stanley Europe Opportunity Fund owned 58,116 GBTC shares worth $2.018 million as of July 31, according to a filing on Monday. Prior to that, the fund owned 28,298 shares worth $1.3 million as of April 30.

The Grayscale Bitcoin Trust issues shares that are solely tied to bitcoin and its market value.

Dennis Lynch, who heads Morgan Stanley’s asset management subsidiary Counterpoint, which is unrelated to the Europe Opportunity Fund, spoke recently at the Morningstar annual investment conference at which he laid out why he’s recently invested in bitcoin.

“I like the idea here that you can bet small, win big,” Lynch said.

“I like to say that bitcoin is like Kenny from South Park, he dies every episode and comes back again,” Lynch said. “And so … you see in the newspaper, the media, that bitcoin’s dead, it’s over this time, and it just continues to persist.”

Investment in cryptocurrencies has boomed this year and sent the prices of the major coins, including bitcoin, to record highs. Bitcoin, the largest by market value, currently trades around $41,000, having gained over 300% in the last 12 months alone. It is highly volatile, but has shown great resilience in the face of selling pressure.

Morgan Stanley is one of many major banks that is gradually increasing its exposure to the cryptocurrency market. JPMorgan gave its retail wealth clients access to crypto funds that included exposure to the Grayscale Bitcoin Trust in July this year.

The Grayscale Trust was established in 2013 and is now the largest public holder of bitcoin. The trust has $28.2 billion in assets under management according to its website. Its shares are currently trading around $34.18. They were valued at around $36 when Morgan Stanley’s fund said it owned the new shares.

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Bullish sentiment toward crypto assets increases with 8 of 10 people seeing bitcoin bounce above $56,000 by year’s end, says Voyager Digital

A hand holds a bitcoin toward the sky in this photo representation of the cryptocurrency.
Bitcoin.

  • Bitcoin is poised to rise above $56,000 by year’s end, a wide majority of survey respondents told Voyager Digital.
  • The cryptocurrency-asset broker also found that more people are bullish in bitcoin vs. the prior quarter.
  • The uptick in bullish crypto sentiment comes in the face of increased regulatory scrutiny.
  • See more stories on Insider’s business page.

Crypto investors have grown more optimistic about the price outlook for bitcoin and other digital assets in the last quarter, even in the face of more regulatory scrutiny, a new survey from Voyager Digital shows.

According to the cryptocurrency-asset broker’s third-quarter sentiment survey results sent to Insider, 8 out of 10 are bullish on bitcoin over the next three months. That’s an uptick from the second quarter, when 7 out of 10 respondents held a bullish view on the market.

The latest survey also found 8 out of 10 see bitcoin topping $56,000 by the end of 2021, representing a 27% rise from Thursday’s price at around $44,000.

“As our user base continues to grow and digital asset adoption increases, our survey results suggest that a greater number of investors see Bitcoin as a better store of value compared to more traditional asset classes such as stocks, real estate, and government bonds,” Steve Ehrlich, Voyager’s founder and CEO, said in the survey statement.

“This is significant when you consider that over a fifth (22%) of respondents have been investing in crypto for over two years,” and that it’s likely many of them will consider not having exposure to traditional asset classes again, he said.

The results also showed 40% expect bitcoin to trade above $71,000 at some point in the fourth quarter, topping the all-time high of $64,863 reached in April. The prior sentiment survey released in June said 38% had expected bitcoin to finish the third quarter between $56,000 and $70,000.

Among altcoins, 40% of investors surveyed by Voyager were bullish on Cardano’s ada token followed by ethereum at 16%.

Scrutiny of the crypto market continued during the third quarter as US regulators sought more avenues to oversee the market. The Treasury Department and other agencies are quickly moving to target stablecoins for tighter regulation, The New York Times reported Thursday.

And Securities and Exchange Commissioner Gary Gensler likened stable coins to “poker chips” in an interview with the Washington Post this week.

He has also called on lawmakers to give the agency authority to legally monitor crypto exchanges. Last week, he said those exchanges need to “come in and talk” to the agency, just days after clashing with trading platform Coinbase over a lending product. Coinbase has since dropped its plans for Lend.

Meanwhile, big-money investors are shying away from bitcoin futures and pivoting to ethereum futures as expectations for bitcoin soften, according to JPMorgan analysts. They noted that in September, bitcoin futures on the Chicago Mercantile Exchange have traded below the price of an actual bitcoin.

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Bitcoin drops another 5% a day after the crypto market shed $360 billion during El Salvador’s BTC rollout

Bitcoin el salvador protest
Many in El Salvador oppose the introduction of bitcoin as legal tender.

  • Bitcoin and ether fell further on Wednesday after plunging during El Salvador’s BTC rollout on Tuesday.
  • Analysts said price falls on Tuesday were accelerated by high levels of leverage in crypto markets.
  • Glitches on exchanges such as Coinbse and Kraken also worsened the situation, analysts said.
  • See more stories on Insider’s business page.

Bitcoin and ether fell again on Wednesday before regaining some ground after plunging during El Salvador’s bumpy bitcoin rollout the day before, with more than $360 billion wiped off the highly leveraged crypto market in just two days.

Bitcoin fell as much as 5% on Wednesday, according to Bloomberg data, before paring losses. It was 1% lower by 9.50 a.m. ET to trade at $46,347, after a two-day drop of 11%.

Ether, the second biggest cryptocurrency by market value, also fell as much as 5% before rebounding somewhat. It stood 0.6% lower at $3,390 early Wednesday, with its two-day fall coming to 14%, Bloomberg data showed.

Cryptocurrencies began to crater on Tuesday as El Salvador made bitcoin legal tender in a landmark moment for the world’s biggest cryptocurrency. The rollout was afflicted by glitches, with the small central American country’s Chivo wallet having to be taken offline.

“Bitcoin is lower on a ‘buy leading up to the big event, sell the fact’ reaction to El Salvador’s historic moment embracing bitcoin,” Edward Moya, senior market analyst at trading platform Oanda, said.

Bobby Ong, chief executive of crypto data company CoinGecko, agreed with Moya’s analysis and said the price falls were so steep due to the effects of leverage in crypto markets.

Read more: The head of research for a blockchain analytics firm breaks down why bitcoin and ethereum can reach $100,000 and $10,000 respectively by next year

Many of the world’s biggest cryptocurrency exchanges such as Binance allow users to borrow large sums to bet on the markets. Yet when prices fall, investors often have to sell out of their positions, or exchanges liquidate them automatically to limit losses.

Matt Blom, head of sales trading at Nasdaq-listed crypto firm Eqonex, said: “Heavy selling on derivatives platforms… caused a cascade of auto-liquidations, like a line of dominoes,” he said. “Over $2 billion of long positions were liquidated in under 20 minutes.”

Matters weren’t helped by problems on major cryptocurrency exchanges Coinbase, Kraken and Gemini, which led to transactions being delayed or canceled.

Coinbase said its issues were caused by “a sudden increase in network traffic and market activity” that led to a “degradation in our services.”

So-called altcoins such as cardano, binance coin, XRP and dogecoin were also nursing heavy losses after falling sharply on Tuesday and Wednesday. The Bloomberg Galaxy Crypto Index, which tracks a range of crypto tokens, was down 0.7% on Wednesday and had shed 11.5% over two days.

The total market value of all cryptocurrencies stood at $2.01 trillion on Wednesday, more than $360 billion below its Tuesday peak.

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Bitcoin drops as much as 4%, sliding further from key $50,000 level

2021 03 13T111735Z_1_LYNXMPEH2C07M_RTROPTP_4_CRYPTO CURRENCY BITCOIN TREASURY.JPG
Bitcoin is the world’s biggest cryptocurrency by value.

  • Bitcoin fell as much as 4% on Thursday, sliding further from the key $50,000 level.
  • One analyst said bitcoin was struggling due to general market nerves ahead of a key speech from the Fed Chair.
  • Its price has risen sharply since July, crossing $50,000 on Monday before pulling back again.
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Bitcoin‘s price fell as much as 4.4% on Thursday as the world’s biggest cryptocurrency slid further away from the $50,000 level reached on Monday.

The token then recovered some ground and traded at $46,990 at 7.35 a.m. ET, according to Bloomberg data, down 3.5% for the day.

On Monday, bitcoin rose above $50,000 for the first time since May after rebounding sharply from below $30,000 in July. The move excited pundits, who suggested it could trigger another leg higher.

But bitcoin has since lost ground, falling around 7% from its Monday high as of Thursday morning.

“Cryptocurrencies lurched lower in the Asian session, with bitcoin poking at the lowest levels in more than a week,” Steen Jakobsen, chief investment officer at Saxo Bank, said in a note.

Read more: This VC only invests in bitcoin companies. Here are her 4 biggest predictions for the cryptocurrency.

Edward Moya, senior market analyst at Oanda, noted bitcoin had dropped ahead of a key speech from Federal Reserve Chair Jerome Powell at the virtual Jackson Hole symposium for central banks on Friday.

“Bitcoin is struggling here as investors await to see if Fed Chair Powell delivers a hawkish surprise and helps drive Treasury yields, which dampens the appeal for risky assets,” he said.

The biggest cryptocurrency has been a major beneficiary of the US’s huge fiscal and monetary stimulus during the pandemic-driven economic crisis. Its price could slip if Powell reveals the central bank will soon start cutting back on its support.

“Regardless of what happens this week at Jackson Hole, many cryptocurrency traders are waiting to see if risk aversion returns and triggers a bitcoin buying opportunity,” Moya said.

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Bitcoin may have to tumble to $25,000 before major investors really buy back in, says CEO of crypto unicorn Amber Group

Bitcoin symbol atm
Bitcoin has tumbled since April.

  • Bitcoin may have to drop to $25,000 before investors really start to buy the dip, Amber Group’s CEO said.
  • Michael Wu said institutions are still interested in crypto, but are wondering where the bottom is.
  • Bitcoin has fallen dramatically from its April record high, thanks in part to a Chinese crackdown.
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Bitcoin may have to fall as low as $25,000 before major investors start snapping up bitcoin in large quantities again, the chief executive of $1 billion crypto lender Amber Group has said.

Michael Wu told Insider in an interview this week he thought bitcoin has to fall further before institutions such as hedge funds are attracted to the asset again. He said he thought that level was probably between $25,000 and $30,000.

Bitcoin fell 5.5% on Thursday to $32,640. That was well below April’s record high of close to $65,000.

“If we really have a flush down to, say, $25,000, or even briefly below that, I think there’s tremendous interest waiting to buy very cheaply at those levels for long term entry,” Wu said.

Read more: A short seller who made 50% returns betting against MicroStrategy lays out his bear case thesis on crypto stocks – and shares an area of the market where he’s incredibly bullish

Bitcoin has tumbled since April, with selling driven by Elon Musk’s U-turn on accepting the token as payment for Tesla cars and a crackdown on crypto mining and transactions in China.

The breakneck rally in the first few months of the year was in large part driven by interest from big institutions like hedge funds and banks, analysts have said.

According to JPMorgan’s crypto expert Nikolaos Panigirtzoglou, institutional interest has all but dried up in recent months. He told Insider in June: “There is no evidence here of a buying-the-dip mentality.”

Wu, whose Amber Group recently gained the backing of major hedge funds and a $1 billion valuation, said institutions are not rushing into the crypto space “like they were doing last year, or the beginning of this year.”

But he said he still has plenty of conversations with institutional investors that are interested.

“I think most of them are still very confident and optimistic about the long term outlook of crypto assets. But in the near term, they are not sure [if we are] at the bottom or near the bottom,” he said.

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Bitcoin tumbles 8% after China steps up crackdown on crypto mining, shutting down 26 key sites in Sichuan

China bitcoin mining crackdown Chinese flag cryptocurrencies
China is increasingly cracking down on bitcoin.

Bitcoin dropped 8% on Monday after Chinese authorities ramped up their crackdown on cryptocurrency “mining” over the weekend, with bodies in the Sichuan province ordering 26 of the biggest miners to halt operations.

The world’s biggest cryptocurrency fell to $32,950 as of 6.20 a.m. ET. Bitcoin was down around 49% from April’s record high of close to $65,000, but was still roughly 12% higher for the year.

Other cryptocurrencies also dropped sharply, with ether down around 6% and binance coin roughly 4% lower, according to Coinmarketcap. A broader market sell-off also appeared to be weighing on crypto, as investors moved towards safer assets.

The latest move by Chinese authorities to restrict bitcoin mining came in the southwestern Sichuan province over the weekend, when bitcoin miners were told to “clean up and terminate” their operations. Sichuan authorities said 26 bitcoin mining companies must be closed down on Sunday, according to a notice seen by the South China Morning Post.

Chinese state media outlet Global Times then reported that more than 90% of China’s bitcoin mining capacity was estimated to be closed down, at least for the short term, on Sunday.

Bitcoin mining – whereby computers solve complex puzzles to secure the network and mint new coins – has become a target in increasingly climate-conscious China because of the huge amounts of energy it uses.

Sichuan’s clampdown followed similar moves by authorities in Xinjiang, Yunnan and Qinghai.

“The dominant driver of bitcoin right now is the crackdown on mining & trading in China that began in May,” Michael Saylor, a leading bitcoin bull and chief executive of tech firm MicroStrategy, wrote on Twitter.

“This created a forced & rushed exodus of Chinese capital & mining from the bitcoin network,” Saylor said, describing this as “a tragedy for China and a benefit for the Rest of the World over the long term.”

Jeffrey Halley, senior market analyst at currency group Oanda, said the broader drop in risky assets following the Federal Reserve meeting was also weighing on bitcoin. Stocks have sold off after Fed officials on Wednesday moved forward their estimates of when the US central bank would have to raise interest rates.

“If, as I expect, the global buy-everything unwind continues this week, bitcoin will feel those chill winds as well,” Halley said.

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