This Week in Bitcoin: Tesla Starts Storing Bitcoin, But Housing and Inflation Worries Weigh Down
Bitcoin kicked off the week with a positive announcement from Tesla about plans to stockpile Bitcoin, but the housing market and inflation concerns weighed on growth.
Bitcoin had a volatile week with multiple ups and downs. Although the price peaked midweek, rising inflation and housing market concerns dragged it down over the weekend.
Bitcoin hit a two-week high of $90,150 on Tuesday, before falling to $85,320 at press time, according to data from CoinGecko. Overall, Bitcoin is down 1.6% this week.
The decline came after the US Federal Reserve released its consumer price index for March, which showed inflation rising to 0.5% - its highest level in six months.
Investors have been cautious about risk assets, including Bitcoin, as macro factors such as surging housing prices and high inflation have made markets volatile. However, there were some bright spots during the week.
ETF Action
Inflows into US Bitcoin ETFs remained positive throughout the week, data from Arcane Research showed, despite a slight decline on Friday as financial markets came under pressure.
Total inflows for the week ended positive with more than $170 million inflows, a sign that investors still view the current Bitcoin price - 22% below its January peak - as a buying opportunity.
Tesla Stockpiles Bitcoin
Electric car giant Tesla has officially confirmed that it will be increasing its balance sheet holdings of Bitcoin. Tesla CEO Elon Musk announced on Monday that the company will be buying about $1.5 billion worth of Bitcoin to protect its assets amid economic uncertainty.
While the move initially sent Tesla's stock price soaring, the market later reacted negatively when Tesla announced plans to raise capital through a stock offering to fund its Bitcoin purchases. Tesla's stock fell 3.2% the following day.
Bitcoin Miners Face Trouble
While Bitcoin prices have been volatile, Bitcoin miners around the world have also been facing challenges as mining difficulty has increased and profits have declined. At the largest cryptocurrency mining conference in Las Vegas this week, many miners discussed diversifying into AI to stay afloat.
“Bitcoin mining is getting harder and harder, and we need to look for alternatives, like AI data centers, to maximize profitability,” Blockstream mining company CEO Adam Back said in a statement.
Is Brazil about to buy Bitcoin?
Rumors that Brazil may start accumulating Bitcoin as a national reserve have been stirring up the crypto community. According to local media reports, the Brazilian government is considering buying Bitcoin as part of its national reserve strategy.
Brazil’s Finance Minister José Carlos Rios said: “Holding Bitcoin not only protects national assets from inflation but also facilitates the development of the digital economy.”
If confirmed, Brazil would be the largest country in Latin America to join the Bitcoin accumulation race, a move that could have a ripple effect on other countries in the region.
Elon Musk's Bitcoin Edited Video Goes Viral
A fake video of Elon Musk presenting the Bitcoin white paper during a speech at SpaceX headquarters went viral on social media this past week. In the video, Musk appears to be presenting the Bitcoin white paper as part of SpaceX's development plan, with Bitcoin symbols subtly embedded in the background.
Although the video was quickly debunked by experts, it has still garnered millions of views on YouTube and Twitter, and has sparked much debate in the cryptocurrency community.
Summary
Despite challenges from inflation and the housing market, Bitcoin continues to be at the center of global financial markets. Moves from Tesla and Brazil promise to have a significant impact on Bitcoin's value in the coming period.