Bitcoin drops after Elon Musk tweets broken-heart emoji for token

The decline dented a stabilisation in Bitcoin and the crypto sector in general this week after a rout in May.
The decline dented a stabilisation in Bitcoin and the crypto sector in general this week after a rout in May.PHOTO: REUTERS

HONG KONG (BLOOMBERG) - Bitcoin slid after a cryptic tweet from Mr Elon Musk hinting at a potential split with the largest cryptocurrency, the latest post from the billionaire to buffet the token’s price.

The coin dropped as much as 5.4 per cent and was trading at about US$36,980 (S$49,113) as of 7.05am in London. The decline dented this week’s stabilisation in the crypto sector after a rout in May. The Bloomberg Galaxy Crypto Index retreated as much as 5.7 per cent.

Mr Musk has roiled Bitcoin and other digital tokens with a string of social media posts. Most notably, the tycoon last month reversed a decision to allow purchases of Tesla electric vehicles with Bitcoin, citing the environmental fallout of the energy required by the servers underpinning the cryptocurrency. That, plus harsh Chinese regulatory rhetoric, led to a plunge in the sector.

In his latest tweet, Mr Musk wrote “#Bitcoin” with a broken heart emoji and a reference to a lyric from the popular song In the End by Linkin Park.

His Twitter account has affected other parts of the market - Samsung Publishing, a shareholder in the producer of the Baby Shark viral YouTube song, surged this week after Mr Musk tweeted about the jingle.

Bitcoin is about US$28,000 shy of its mid-April record of almost US$65,000. The biggest believers in cryptocurrencies argue that the token is just consolidating before a run higher to new records.

But Mr Musk’s spotlight on environmental risks - and the way his tweets drive swings in prices - have hurt the narrative that the virtual currency is bound to win more mainstream adoption over time.

After suspending Bitcoin payments to Tesla, Mr Musk later said that the company had not sold any of its holdings of the digital token - clarifying another of his tweets that raised questions about whether Tesla might have done so.

The repeated posts have fuelled speculation over just why the electric-car pioneer is issuing crypto missives.

Tesla in February disclosed a US$1.5 billion Bitcoin investment. In April, the firm’s earnings report showed it had sold 10 per cent of its Bitcoin holdings.

Despite May’s rout, Bitcoin is up 285 per cent over the past year, while second-ranked Ether is up more than 1,000 per cent. The Bloomberg crypto gauge has climbed approximately sixfold.