Thu. Feb 2nd, 2023

Bitcoin reached its highest level in more than two weeks Monday, buoyed by

MicroStrategy Inc.

MSTR 15.89%

completing its $500 million offering of junk bonds to buy bitcoin and by fresh comments from

Tesla Inc.

Chief Executive

Elon Musk.

The world’s largest cryptocurrency by market value traded as high as $41,046.77—a nearly 11% rise from its Friday level at 5 p.m. ET. The market value of all bitcoin in circulation climbed to $752.23 billion, according to CoinDesk.

MicroStrategy said in a securities filing Monday it raised $488 million from its bond sale, an increase from the $400 million it initially planned. The funds will be used to purchase additional bitcoin. The company has been a longtime investor in the cryptocurrency, and this was its third bond sale to purchase bitcoins in less than a year.

“That [MicroStrategy offering] is going to be a massive upward price catalyst because $488 million is a lot of inflow,” said Meltem Demirors, chief strategy officer at London-based asset management firm


“Traders are going to position themselves around that event because they know there is going to be volatility.”

Despite recent volatility, Ms. Demirors said she expects longtime investors in bitcoin to hold on to their positions for the long term. Trading in bitcoin has been relatively rangebound in recent weeks. She expects that could continue and that, by fall, bitcoin could possibly return to record highs of more than $60,000 apiece. The cryptocurrency had lost around 40% of its value after peaking this spring.

Others are less optimistic that bitcoin’s downward slide has ended. Pankaj Balani, chief executive of Delta Exchange, said he thinks bitcoin will reach between $45,000 and $50,000 later this week, but selling pressure will then resume. Good news for bitcoin like the MicroStrategy fundraising isn’t “good enough to change the broader correction of the market,” he said.

One reason bitcoin might see more rangebound trading is that the number of outsize bets made on its rise have diminished in recent months, Ms. Demirors and Mr. Balani said.

Bitcoin’s latest ascent started Sunday after Mr. Musk tweeted that he would reinstate accepting bitcoin payments for Tesla vehicles once more of the power used to harvest fresh coins comes from renewable sources. That is an about-face from his statement last month that Tesla would no longer accept bitcoin, a move that sent the cryptocurrency lower.

Mr. Musk’s pronouncements have held great sway over cryptocurrency markets this year, causing steep losses and gains for investors depending on his social-media mood.

Meanwhile, billionaire hedge-fund manager

Paul Tudor Jones

said Monday on CNBC that he has bitcoin in his portfolio because it is a “diversifier.” Last week, El Salvador became the world’s first country to pass a law that would deem bitcoin legal tender.

Other cryptocurrencies also rose Monday: litecoin climbed 4.4% and ether grew 2.9%.

Bitcoin, Dogecoin, Ethereum: Cryptocurrency Markets

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By rahul