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Elon Musk’s $6,000 Bitcoin Pump Just Liquidated $420 Million of Shorts

Elon Musk’s $6,000 Bitcoin Pump Just Liquidated $420 Million of Shorts

When the Tesla CEO changed his Twitter bio to “Bitcoin,” it pumped its price to $38,000 and squeezed out short sellers.

By Shaurya Malwa  on Source Decrypt

 

Just a few hours ago, Musk changed his bio to say just one word—“Bitcoin”—endorsing the digital currency to his 43.7 million-strong Twitter followers. That led to a surge in Bitcoin’s prices minutes afterward, with the asset jumping from the then $32,000 level to over $35,000 in the space of 15 mins, and to over $38,000 by press time.

 

But not everyone made money. Traders who were “short” Bitcoin—those who borrowed capital to bet on falling prices to make profits—were caught on the wrong side. The price surge ended up liquidating their positions, a term for the automatic close of positions when prices hit a predetermined level (usually causing huge losses to traders).

Nearly $350 million worth of Bitcoin shorts were liquidated in the past hour, data from Bybt showed. Meanwhile, $120 million in long positions—traders borrowing capital to bet on higher prices—was liquidated as well, likely caused by the price volatility (even as prices, ultimately, went up).

 

Traders on crypto exchange Binance had it the worst. They lost over $103 million in shorts since Musk’s change in bio, with $57 million of that coming in the first ten minutes alone.

 

The pump caused a change in price trend for Bitcoin, which had seen falling prices and bearish sentiment in the past few days. It coincided with a mammoth options expiry for Bitcoin, one to the tune of billions of dollars which some feared could have caused downward pressure on Bitcoin.

 

But it seems like Musk single-handedly saved the day.

 

 

 

Elon-boosted, BTC takes off

 

MOVERS

8am EST 29th January 2021
Crypto: Biggest price rise

DOGE251.32%

Equities: Biggest price rise

DIS3.39%

Bitcoin

$34,207.95

Crypto: Biggest price loss

ZRX-3.55%

Equities: Biggest price loss

FB-1.75%

XRP

$0.27

Crypto: Biggest vol increase*

NANO2,076.63%

Equities: Biggest vol increase*

TQQQ100.37%

Tesla

$830.53

Crypto: Biggest price rise

DOGE251.32%

Equities: Biggest price rise

DIS3.39%

Bitcoin

$34,207.95

Crypto: Biggest price loss

ZRX-3.55%

Equities: Biggest price loss

FB-1.75%

XRP

$0.27

Crypto: Biggest vol increase*

NANO2,076.63%

Equities: Biggest vol increase*

TQQQ100.37%

Tesla

$830.53

*Volume bought in USD over the past 24 hours on the Uphold platform

 

WHAT’S UP

Bitcoin Rockets $5K In Mere Minutes After Endorsement From World’s Wealthiest Human

 

Elon Musk’s touch, King Midas-y, okay, stipulated. But could Musk simply adding #bitcoin to his Twitter bio actually cause BTC to suddenly snap?

BTC jumped 14% in about 30 minutes – in most years, the S&P 500 doesn’t go that high – beginning moments after Musk made the tweak.

“This has to be the biggest upsurge in history,” Bitcoin evangelist Joseph Young tweeted, as BTC rose above $37K.

Young pointed out a “perfect storm,” perhaps, of options expiry, as well as the attention heaped upon day-trading excitement, with Reddit forum dwellers in the role of David, hedge funds as Goliath and GameStop flying out of a slingshot.

BTC moving past $37,000 was still very much in play as of 8 a.m. (EST). The price was $36,800. January’s winding down and BTC is on a pace to notch a 30% return for the month.

“It seems like Musk single-handedly saved the day,” Decrypt said.

 

WHAT’S DOWN

GameStop Frenzy Leaves Investors Confronting Worst Bubble Fears

 

Dow futures tanked 300 points early on Friday morning (EST) a sign that a nasty session was in the works.

Investors of all stripe, size and risk-awareness levels are clashing in a hall of fun house mirrors. Somewhere in the distorted glass flying about is a clear, unmistakable image: volatility run amok

GameStop was $5 this summer. Just in December the chain announced it was closing 1,000 stores. In pre-market trading in the U.S. GME was almost $400 a share. Everybody is talking about this. Legislators want hearings. Online brokers need cash. Pundits need help explaining how a short squeeze works. And veteran traders are grasping for a sign that markets haven’t gone off the rails.

The Dow lost some 600 points on Wednesday. That day, volume exceeded 23 billion shares, surpassing levels not seen since 2008 during the worst of the global financial crisis.

Yesterday, the Dow rebounded by 300 points on a day that everything seemed to rally. Take Dogecoin, adopted by a reddit group called SatoshiStreetBets. DOGE rocketed 900% to almost $0.08, an all-time high, early on Friday.

Over the past few hours, however, DOGE fell 40% off that mark.

 

WHAT’S NEXT

‘There’s A Short Squeeze In Silver’

 

Not content to squeeze GameStop shorts, the r/wallstreetbets crowd has turned its attention to silver.

Pile into IShares Silver Trust (SLV), the largest silver ETF, thread participants had cajoled to one another yesterday, Bloomberg reported, noting that some rhetorical-pitchfork-wielding community members bemoaned powerful forces unfairly keeping silver prices artificially low.

First Majestic Silver Corp., which was highlighted on Reddit as a short-squeeze target, rose nearly 40%.

SLV wound up popping 7%. Spot silver prices increased 6.8%. That’s the biggest move since late summer.

Said Phil Streible, strategist, Chicago-based Blue Line Futures: “There’s a short squeeze going on in silver.”

 

FOCUS

Elon Musk Effect, By The Numbers

 

Musk tweets, BTC erupts, we break it down:

* 43.7: Number of millions of Musk followers on Twitter.

* 3:22 A.M. (EST): Time stamp of Musk tweet.

* 13.9: Percentage increase that BTC had in about thirty minutes following Musk tweet.

* 57: Amount, in millions, of BTC short positions closed on Binance after Musk’s tweet.

 

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Nothing shared or published by Uphold constitutes an investment recommendation, nor should any data or content published by Uphold be relied upon for any investment activities. Uphold strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions.

2021-01-30T01:10:28+02:00January 30th, 2021|Categories: News|0 Comments

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