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Elon Musk, the chief executive of Tesla Inc, reiterated his support for Bitcoin at a conference Wednesday, saying he owns the token along with Dogecoin and Ethereum.
Bitcoin expanded its gains to over $32,000, continuing a rebound after erasing most of its gains for the year. The final move came when Elon Musk, Jack Dorsey and Cathie Wood spoke at a panel on the future of Bitcoin.
The largest digital currency rose more than 8% to about $32,270 on Wednesday at 2:27 p.m. in New York. Other cryptos also advanced, including Ether and Dogecoin, while the Bloomberg Galaxy Crypto Index was also in the green.
Musk, the chief executive of Tesla Inc., reiterated his support for Bitcoin, saying he owns the token along with Dogecoin and Ethereum. He also said that Space Exploration Tecnologies Corp. also owns Bitcoin, as does Musk’s electric car company.
The token rebounded after dropping below $30,000 earlier in the week, its first attempt there since June.
“The fear in the market was that if Bitcoin falls below $30,000, the price will fall violently,” said Naeem Aslam, chief market analyst at Ava Trade Ltd. “In reality, that is not what we have seen. Bitcoin price has remained stable and we have not seen panic selling.”
Bitcoin and other cryptocurrencies have fallen since mid-May, wiping out some $1.3 trillion from their market value. Bitcoin has faced a series of hurdles, including tightened regulatory oversight in China, Europe and the US and concerns over the energy needed for the computers that underpin it. Investors have also generally become more cautious about speculative assets.
Bitcoin could still test the $25,000 support level in the coming weeks, Ava Trade’s Aslam said. A break above $32,000 would herald a stronger recovery, according to Steen Jakobsen, chief investment officer at Saxo Bank.
“Bitcoin and Ethereum managed to rally together after Bitcoin fell through the key $30,000 area yesterday, but needs to really recover sustainably above $32,000 to dig itself out of a hole,” Jakobsen wrote in a note.
Bitcoin’s progress has shrunk to about 8% this year after falling from an April all-time high of nearly $65,000. That compares to a 15% jump in the S&P 500 index in 2021.
Proponents argue that the virtual currency provides an inflation hedge and will gain wider institutional adoption. Such stories have always been controversial and are now even more controversial, although Bitcoin’s most ardent fans continue to predict big long-term returns.
“Regulatory and environmental issues are likely to keep Bitcoin heavy, but improvements on both fronts should happen before the end of the year,” Edward Moya, senior market analyst for America at Oanda, wrote in a note. He added that institutional investors are “ready to place big long-term bets” if a plunge to $20,000 is avoided.
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