Elon Musk: Bitcoin is on the verge of seeing broader acceptance by finance

Bitcoin (BTC) is on the verge of seeing broader acceptance, Elon Musk, the CEO of Tesla, said in a Clubhouse conversation on Feb. 1.

Clubhouse is an exclusive audio chat social media platform that is invite-only. Members can join various conversations, akin to an online private conference.

"I am late to the party but I am a supporter of #Bitcoin." - Elon Musk

— Dan Held (@danheld) February 1, 2021

Elon Musk publicly comments about Bitcoin

During the conversation with Andressen Horowitz and other prominent investors, Musk was asked about his thoughts on Bitcoin.

On Jan. 29, Musk put the word “Bitcoin” in his Twitter bio, causing the price of BTC to rally by more than 14% in 30 minutes.

After the occurrence, Bitcoin investors and enthusiasts were highly anticipating positive comments about crypto, in general, from Musk.

When asked about Bitcoin, Musk said according to industry executives who were able to listen to the chat:

"I do think Bitcoin is a good thing. I'm a supporter of Bitcoin. I think Bitcoin is on the verge of getting broad acceptance by conventional finance."

Industry executives were generally positive about Musk’s comment on Bitcoin. James Todar, a partner at Greymatter Capital, said:

“One of the most forward thinking inventors of our age missed bitcoin. On Clubhouse just now, @elonmusk tells of a friend who gave him a cake in the shape of a bitcoin back in 2013. Despite being ‘late to the party’ Elon thinks bitcoin is on the verge of acceptance in finance.”

Dan Tapiero, a partner at 10T Holdings, shared a similar sentiment. He said that the richest man in the world being a Bitcoin supporter “feels good.” Tapiero wrote:

"Somehow it feels good that @elonmusk , a #Bitcoin supporter near my age is the richest man in the world. Was getting tired of Gates/Buffett/Bezos...older guys in old tech or no tech and not bitcoiners. With an iconoclast and a visionary as example maybe there is hope for Gen Z."

As Cointelegraph reported, prominent Bitcoin investors such as billionaire Tim Draper have been asking Musk and his businesses such as Tesla to accept BTC directly, which would give Bitcoin a massive boost in global awareness. 

So why did Bitcoin drop instead?

The price of Bitcoin pulled back by around 3% immediately after Musk commented about the dominant cryptocurrency.

There are two reasons why the price of Bitcoin might have dropped after Elon talked about Bitcoin. First, some may have anticipated Musk to disclose his Bitcoin holdings. 

Second, the market might have reacted with a sell-the-news response, as the minor pullback occurred merely minutes after Musk's comments were publicized.

As Cointelegraph reported, the price of Bitcoin has been showing weakness since the "Elon pump" to $38,000 on Friday. Traders are now closely watching technical resistance at $34,500 and $35,000 that must be broken to avoid more downside in the short term.