Elon Musk, the billionaire chief executive of electric car-maker Tesla
The bitcoin price, which soared toward $50,000 per bitcoin this week after Tesla made the shock announcement it had bought $1.5 billion worth of bitcoin, is up around 350% over the last 12 months.
Now, data has revealed Musk, who has been warned by lawyers his bitcoin-boosting tweets could lead to questions from the U.S. Security and Exchange Commission (SEC), has triggered the liquidation of $1.2 billion worth of bitcoin price shorts in recent weeks.
This week, $602 million worth of bitcoin short positions got liquidated in the direct aftermath of Tesla‘s announcement it had added bitcoin to its books, analysts from Arcane Research showed, using data from Bybt.
This follows an earlier short-squeeze of $612 million late last month, driven by Musk changing his Twitter bio to “#bitcoin” and tweeting: “In retrospect, it was inevitable”—sending the bitcoin price almost 20% higher in a matter of minutes.
However, despite traders getting burnt by Musk’s ability to boost the bitcoin price, it’s thought people will continue to take both short and long positions, betting whether the bitcoin price will rise or fall in the short term.
“I do not believe that we’ll see less shorting of bitcoin onwards,” says Arcane analyst Vetle Lunde, speaking via Twitter DM. “Traders are prone to speculate, and many are eyeballing a potential top now. In general, traders seem very eager to take considerable risks in the market right now, evident by the violent uptick in liquidations on both the long and short side since December.”
The bitcoin price, pushed on by Tesla‘s bitcoin-buy and New York-based banking giant BNY Mellon’s bitcoin and crypto support, climbed to $49,000 per bitcoin on the Luxembourg-based Bitstamp exchange on Thursday night before falling back slightly.
The recent spike in bitcoin and cryptocurrency prices has been called a “speculative mania” by a top Bank of Canada official this week, who warned in a speech that the market had “an atmosphere in which one high-profile tweet is enough to trigger a sudden jump in price.”
“Investors must remember that bitcoin is not a simple get-rich-scheme,” Gavin Smith, chief executive of bitcoin and cryptocurrency group Panxora, said in emailed comments.
“In reality, it has been, and will continue to be, susceptible to downward price swings—especially when the short-term winners look to withdraw their earnings. While another upwards price run is on the horizon, investors should remain cautious and look to implement a steady risk management strategy.”
Read here about Ethereum price.
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