Bitcoin on the rise after Elon Musk throws his weight behind it

The cryptocurrency rose by thousands of dollars after a single three-sentence tweet from the billionaire.

Bitcoin rose by nearly 10 per cent to $50,909 on Monday.

That’s a 9.8 per cent increase in the past 24 hours, at the time of writing.

The sharp rise came after tech icon Elon Musk threw his weight back behind the cryptocurrency.

Previously, the Tesla inventor had cast doubt on the virtual coins by backtracking on his promise that customers could buy his cars with the cryptocurrency.

Musk pulled the plug on crypto transactions over environmental concerns, as an enormous amount of energy is required to mine bitcoin online.

However, early on Monday, Musk intimated that Tesla might resume bitcoin transactions in the near future, prompting a sharp rise.

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Bitcoin rose sharply on Monday. Picture: Coinbase

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“When there’s confirmation of reasonable (~50 per cent) clean energy usage by miners with positive future trend, Tesla will resume allowing bitcoin transactions,” he tweeted in response to an article published by Coin Telegraph.

The story was about Magda Wierzycka, chief executive of a South Africa financial services company called Sygnia, accusing Musk of manipulating bitcoin markets.

However, Musk fired back, saying it was purely his worries over clean energy that had led to his “pump and dump” approach towards the coins.

“This is inaccurate,” he wrote in response.

“Tesla only sold ~10 per cent of holdings to confirm BTC could be liquidated easily without moving market.”

A German research paper published in the academic forum Joule found that bitcoin was responsible for up to 22 megatons of CO2 emissions annually – which is the same level of pollution coming from Jordan and Sri Lanka combined in an entire year.

This is inaccurate. Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market.

When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions.

— Elon Musk (@elonmusk) June 13, 2021

El Salvador has introduced a radical new measure to mine cryptocurrency given its high energy output.

The small South American nation plans to use power from its volcanoes to mine bitcoin.

El Salvador president Nayib Bukele last week said his country is creating a mining hub that will use “very cheap, 100 per cent clean, 100 per cent renewable” energy from volcanoes.

Just hours earlier, Mr Bukele announced that bitcoin would become El Salvador’s official currency alongside the US dollar.

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President Bukele said a state-owned geothermal electric company is offering its facilities for the project. Picture: @nayibbukele/Twitter

The sharp incline in prices follows after a tough week for bitcoin after a global bank considered tightening laws on Friday.

The Basel Committee on Banking Supervision, which sets the rules for banks in 10 different countries including the US, Canada and nations in Europe, said that bitcoin posed a considerable risk to the banking sector.

The committee proposed a reform where banks had to set aside capital as a financial safety net in case a crypto crash brought them down.

Bitcoin plummeted to its lowest point for this year on January 4, hitting rock bottom at $A36,000.