After a weekend of correction, Bitcoin managed a slight rebound that puts it on the verge of US$40,000. When the cryptocurrency market was about to collapse while waiting for the European Parliament to vote this Monday on a new regulatory framework for cryptocurrencies, Elon Musk generated a glimmer of hope with just one tweet.
Through a tweet, the CEO of Tesla and SpaceX gave strong support to Bitcoin and managed to reverse expectations. In this context, the cryptocurrency market started trading with increases of up to 1%. Terra standed out with a rise of over 7%.
In a Twitter thread on inflation, Musk expressed: “As a general principle, for those looking for advice from this thread, it is generally better to own physical things like a home or stock in companies you think make good products, than dollars when inflation is high.” He added: “I still own & won’t sell my Bitcoin, Ethereum or Doge fwiw.” Bitcoin, which had fallen as much as 2.9% before Musk’s tweet, briefly erased the losses before pulling back again.
The world’s largest digital currency has remained in a tight trading range over the weekend, with highs just below US$40,000 and lows around US$37,000, pressured by risk aversion in global markets. As for altcoins, Ethereum remains around US$2,500 and the rest of the market leaves slight declines. Total capitalization shows a 1.3% decline to US$1.72 trillion, according to CoinMarketCap data.
However, the threat of restrictive regulation in the European Union (EU) is keeping investors away from the market. This Monday, the European Parliament will vote on the new regulatory framework under the name Markets In Crypto Assets (MiCA) that puts the Proof of Work (PoW) model under the spotlight.