The cryptocurrency markets are no strangers to volatility, but the past 24 hours have been unprecedented even by Bitcoin’s standards. A perfect storm of events and speculation rocked the world’s largest digital asset, taking it on a rollercoaster ride that left investors and analysts dizzy. Here’s a recap of the mania that unfolded:
The Musk Effect
It all started with a seemingly innocuous tweet from Elon Musk at 9 am ET. The Tesla CEO, known for his ability to move markets with his social media musings, announced that his companies would be “revisiting” their decision to suspend accepting Bitcoin payments due to environmental concerns. This immediately sparked a buying frenzy, with BTC spiking over 15% in an hour to bust through $40,000 for the first time since May.
United Nations Gets Crypto Fever
Just as the Musk euphoria began to cool off in the late morning, fresh Bitcoin mania was triggered by leaked reports that the United Nations was actively exploring holding Bitcoin as part of its investment reserves. Unconfirmed sources claimed that several UN member nations were pressuring the organization to diversify away from the U.S. dollar, long the global reserve currency.
While the UN released a statement neither confirming nor denying the Bitcoin reports, the mere possibility of such a significant institutional player embracing crypto supercharged the markets. Bitcoin came within a whisker of $50,000 as FOMO (fear of missing out) set in for traders.
China Cracks Down (Again)
Bitcoin’s white-hot rally was ruthlessly cut short in the late afternoon hours when several Chinese provincial authorities reaffirmed the central government’s hardline stance on cryptocurrencies. Reiterating past rhetoric that digital tokens cannot be used for transactions, the announcements from officials in Beijing and Shenzhen prompted an immediate crypto sell-off.
Within 30 anxiety-inducing minutes, Bitcoin plunged from just under $49,000 down to $41,300 as Chinese miners and investors fled en masse. The headache persisted into the evening after the U.S. Treasury Department released a brief statement saying it was “monitoring” recent cryptocurrency developments, hinting at potential new regulations.
Tesla Buyback Bonanza
Just when the crypto markets appeared headed for freefall, Tesla’s Elon Musk returned to his Twitter pulpit shortly after 7 pm ET to drop another bombshell announcement. The eccentric billionaire revealed that Tesla had repurchased a sizable position in Bitcoin after trimming its stake several weeks ago, due to the token’s improving environmental profile.
The news turbocharged Bitcoin once again, catapulting it from $42,800 just before the tweet back up over $52,000 within two hours. Momentum continued to build in the evening as other major corporations like Apple and Netflix were rumoured to be closely eyeing their own potential Bitcoin plays.
ETF Approval On The Horizon?
With Bitcoin skyrocketing despite a total absence of new fundamental news beyond Musk’s corporate buyback, speculation ran rampant that the U.S. Securities and Exchange Commission (SEC) may finally be on the cusp of greenlighting a Bitcoin exchange-traded fund (ETF). For years, the regulator has batted away numerous applications from asset managers wanting to launch crypto ETFs.
These funds traded on major exchanges would open up Bitcoin exposure to a massive influx of institutional and retail capital currently parked on the sidelines. Unconfirmed chatter began to circulate at midnight that the SEC could approve several Bitcoin ETFs by the following morning.
Faced with the prospect of easier access to Bitcoin than ever before, the fear of missing out frenzy kicked back into high gear. Bitcoin blew past $56,000 then $60,000 in a matter of minutes around 2 am ET as large traders aggressively front-ran the rumoured ETF approval decision.
Dawn Of A New Era
With such a dramatic entrance into the $60,000 territory, a price level not seen since the April peak, Bitcoin trading took on a frenzied mood heading into the 6 am ET mark and the start of the new trading day. Leveraged speculative buying continued to propel prices ever higher, with Bitcoin ultimately reaching an intraday record print of $67,593 on the Coinbase exchange at 5:53 am ET.
While many analysts were stunned by Bitcoin’s unfathomable perseverance in the face of both good and bad newsflow, a growing consensus emerged that the 24 hours of pandemonium may have represented a historic paradigm shift. With potential involvement from major mainstream corporations, funds, and even international governing bodies now on the table, the path appears clear for Bitcoin to transition out of the wild western fringes and into a formidable position as a core asset of the global financial system.
Only hours into the new trading day, futures markets were already pricing in a potential rally to $100,000 per Bitcoin before the end of the year. As one veteran crypto analyst breathlessly remarked,
“We just witnessed the end of the beginning for Bitcoin. If what occurred over the past 24 hours was just the opening salvo, there’s no telling what the next chapter will bring.”
