Elon Musk praises Bitcoin pushing it back up to $36,000

Posted: 2 February 2021 7:54 pm
btc wednesday

Elon Musk has said that Bitcoin could be on the verge of mass adoption, with record numbers of new wallet addresses supporting that theory.

  • Bitcoin is up 7.3% on the day to $36,139
  • Elon Musk says Bitcoin is on the verge of “mass adoption” in Clubhouse podcast
  • New active wallets increased in January by 17.3 million

Bitcoin is trading at $36,139 at the time of writing according to data from CoinGecko. That’s an increase of 7.3% from the intra-day low of $33,420.

This comes hot on the heels of a brief spike up to $38,000 over the weekend, following commentary by self-professed Dogecoin CEO Elon Musk, who has since replaced the memecoin with “#bitcoin ” in his Twitter bio. The pump was short-lived, with price returning to the $33,000-$35,000 range over the following days.

A screenshot showing Elon Musks twitter with #bitcoin as the bio.

Earlier this week, it was reported that Bitcoin is now more heavily shorted by hedge funds than at any time in the past decade of Bitcoin’s existence, with over $1.37 billion worth of shorts open at the start of the month. This has led to some commentators calling it the next “GameStop,” given the potential for a short squeeze if the Bitcoin price were to move north significantly.

While this is only a recent development in Bitcoin’s price dynamics, it will be interesting to see the influence Bitcoin futures has on the market moving forward, given the discussion about a BTC supply shortage thanks to renewed retail interest via custodial platforms like PayPal.

Elon Musk continues to move markets with commentary on Bitcoin

This week’s price movements come amid overt backing by the Twittersphere’s most influential businessman Elon Musk. Speaking in a podcast released on the Clubhouse audio app, Musk made some of his most strident claims about Bitcoin yet.

Musk claimed that he was “late to the party” and that Bitcoin was “on the verge of mass adoption.” The latest commentary by Musk, one in a string of pro-Bitcoin pronouncements by the electric vehicle pioneer, comes right as data released by the BlockCrypto appears to support his claim – showing that Bitcoin adoption is increasing.

How to buy Bitcoin

New active wallets show consistent Bitcoin adoption

The images below show that there is an increase in the creation of new Bitcoin wallets as well as an increase in the number of active wallets in general (as opposed to dormant HODLer wallets). This could suggest an increased number of people are participating in the market or actively using Bitcoin as a currency.

As seen above, the number of new Bitcoin wallets has steadily been increasing since February 2018, when numbers dropped dramatically following the all-time high set in December 2017 of 18 million wallets. This period was the immediate aftermath of Bitcoin’s bull run, which saw the digital asset post an all-time-high of $20,000 before a sharp price decline known as the Bitcoin “winter.”

Fast-forward to January 2021, which saw the addition of a further 17.07 million new wallets to the Bitcoin blockchain. This time around shows a much more gradual and sustained increase compared to the sporadic numbers seen in 2017.

With a world of 4.6 billion Internet users, there is still some catching up to do. However, the consistent growth since 2018 certainly looks healthy – only time will tell if Musk is right and Bitcoin achieves mass adoption.

Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, keep your crypto safe with a hardware wallet and dive deeper with our simple guide to DeFi.

Disclosure: The author owns a range of cryptocurrencies at the time of writing

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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