The Bitcoin price is bouncing back after crashing to a multi-month low of $46,000 after Tesla’s Elon Musk said that Tesla would stop accepting in the currency. The BTC is trading at $50,533, which is almost 10% above its overnight low.
Crypto expert believes that Bitcoin price will bounce back
Many investors, including Barry Sternlicht, the billionaire founder of Starwood Capital Group, have sold some of their BTC holdings. Most of them are afraid of the loss of confidence after Tesla stopped accepting the currency, rising inflation, and the potential capital gains tax under Joe Biden’s tax plan.
However, some analysts are still optimistic about the currency. One of them is Anthony Pompliano, the founder of Pomp Investments. In an interview with CNBC, he cited several reasons why he expects Bitcoin price to keep rising.
First, he noted that Tesla, SpaceX, and Elon Musk himself have not sold their BTC holdings. Tesla already owns Bitcoin worth billions of dollars, which it bought earlier this year. Still, it is unclear whether the company will sell them since it has not released its regulatory materials.
Second, he pointed to the fact that many Bitcoin miners are striving to reduce their carbon emissions. Furthermore, in some countries like in the United States, the cost of wind and solar is falling. He noted that 75% of Bitcoin miners already use some form of renewable energy to run their operations. Importantly, he said that the amount of coal used in the banking sector was substantially higher.
Further, he noted that the current sell-off has been positive for Bitcoin from a marketing perspective. Furthermore, most television networks like CNN and CNBC have been talking about Bitcoin since Elon Musk sent his tweet. As for the marketing, Pompliano believes that Tesla could be about to unveil a cleaner Bitcoin mining equipment. Watch the interview below.
Other catalysts for higher BTC prices
Meanwhile, MicroStrategy announced that it had bought more Bitcoins. In a Tweet, Michael Saylor, the CEO, said that the firm had spent $15 million to acquire 271 BTC. This brought is total holdings to more than 91,850, currently worth than $4.592 billion.
Another reason why the Bitcoin price dropped is the relatively strong US dollar after the recent inflation data. In most periods, BTC tends to do well when the dollar is weak. In a note today, analysts at ING wrote that the current dollar rally did not have legs. If the thesis holds, this could be a positive thing for Bitcoin prices. They wrote:
“We don’t expect the dollar rally prompted by high US April CPI to have persistent legs as imminent Fed tightening is unlikely and the deeply negative front-end US rate should dominate and weigh on USD. DXY to move below 90.00 in the coming weeks.”
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