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Bitcoin Soars After Tesla CEO Elon Musk Says This 1 Word on Twitter

By Joe Tenebruso - Updated Jan 29, 2021 at 3:29PM

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The world's richest person has the power to move a $600 billion market with a single hashtag.

The markets are swinging wildly these days, especially if there's news pertaining to Elon Musk.

Tesla's (TSLA 1.24%) CEO placed one word -- #bitcoin -- in his Twitter (TWTR 2.25%) profile. And that was apparently all that was needed to spark a sharp rally in the cryptocurrency's price on Friday. 

A digital circle around the symbol for bitcoin.

Tesla CEO Elon Musk has an interest in bitcoin. Image source: Getty Images.

Bitcoin's price surged more than 15% to over $38,000 following Musk's one-word addition, before pulling back to roughly $34,500. The violent upward move led to a cascade of short-seller liquidations, as bears were forced to close nearly $400 million in short positions, according to Coinbase. "This huge melt-up is due to Elon's tweet," crypto lender Nexo co-founder Antoni Trenchev told Bloomberg. 

The bulls hope that Musk is signaling either he or -- even better -- Tesla is investing in bitcoin. Should the popular electric vehicle and renewable energy company announce that it has converted some of its more than $19 billion in cash reserves into bitcoin, the cryptocurrency's price would likely skyrocket. 

Other public companies, such as business intelligence specialist MicroStrategy (MSTR 1.50%), have begun to make bitcoin a key part of their treasury management strategies. MicroStrategy has already invested more than $1 billion into the cryptocurrency. Its 70,784 bitcoins are currently worth more than $2.4 billion. 

MicroStrategy helped to start a trend among companies that have begun to purchase bitcoin -- one that would likely accelerate if Tesla were to join their ranks. Such a game-changing announcement would create "a safe zone for some of the smaller companies and possibly everyone in the S&P 500 to allocate into bitcoin," Trenchev said.

Of course, as of right now, this is all just conjecture. Yet at least for today, the bulls are taking it as another reason to buy bitcoin.

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