Furore on social media - is this what caused Bitcoin to surge?

Furore on social media - is this what caused Bitcoin to surge?

Bitcoin surged to around $38,500 after the billionaire tech mogul Elon Musk added a #Bitcoin reference to his Twitter bio. With Bitcoin rising as much as 16%, following the tweet, the impact of influencers and celebrities within the crypto space has once again been reaffirmed.

Binance announced that it was having to briefly suspend its withdrawals, on the back of huge retail buying. The CEO of Binance, Changpeng Zhao, cited that a rush of new users had put its systems under stress, and that Binance was “almost running out of DOGE coin addresses”, an announcement that showcases just how sensitive the market is to sudden unexpected events. An event, in this case, that also took the form of a tweet. 

Musk’s tweet came after the stocks and crypto trading app Robinhood restricted users from trading several stocks after the short squeeze saga. On Thursday Robinhood limited the trading of GME (Gamestock) and various other stocks by individuals, still permitting them to be sold, but restricting their purchase. 

Those speaking out against the free-trading app stated that the actions of the company had been against individual users, yet still permitted hedge funds to freely trade them, and thereby cover their short positions.

It seems that traders then moved to the cryptocurrency market, with Dogecoin, a favourite cryptocurrency of Musk, climbing into the cryptocurrency top ten, following huge retail-led buying.

Musk also tweeted an image of a ‘Dogue’, referencing the Dogecoin meme, which started as a joke between two IBM engineers and resulted in the now popular Dogecoin token. What started as a joke, is now very much a part of internet meme culture, as well as an asset that is actually being taken seriously in some quarters.

In opposition to all the retail investor-led hoo-ha, European Central Bank Governing Council Member, Gabriel Makhlouf, said that “Bitcoin investors may lose everything”, perhaps in an effort to downplay the success of the number 1 cryptocurrency and to quell the rising tide of retail interest.

The recent wave of support in the crypto space reinforces the decentralised message that lies at its heart, with even Coinbase Chief Technology Officer, Balaji Srinivasan, stating via Twitter:  “We’re going back to our roots: encryption, privacy, peer-to-peer, the rights of the individual, free expression, and decentralization of power.”

A lot happening in the space - will Bitcoin and the rest of Crypto weather the storm? It looks likely, and one thing is certain, many more eyes will be watching as the next crypto, soap-like drama, unfolds.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. 

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