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Bitcoin Rises Despite Dollar Strength as Elon Musk Adds BTC Payment Option
Tesla accepting bitcoin payments and running its own nodes is "massively bullish," according to one analyst.
Updated Mar 6, 2023, 3:10 p.m. Published Mar 24, 2021, 9:31 a.m.
Bitcoin (BTC) jumped early Wednesday after the Tesla CEO Elon Musk said the electric vehicle maker is now accepting the cryptocurrency as a payment option. Musk's Twitter announcement overshadowed the dollar's strength, helping the cryptocurrency stay bid.
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"You can now buy a Tesla with [b]itcoin," Musk tweeted at 7:02 UTC (3:02 a.m. ET), adding the cryptocurrency received in payments won't be converted to cash, meaning the company is adding to its already sizable stash of bitcoin.
Bitcoin rose from $54,700 to above $56,000 following Musk's announcement, having defended support at $53,000 on Tuesday. Tesla announced in early February it had bought $1.5 billion worth of bitcoin, validating the cryptocurrency's appeal as a reserve asset.
While the electric vehicle maker's acceptance of crypto as payment will undoubtedly grab the headlines, it's something Musk had said he likely would do when he announced Tesla's bitcoin investment earlier this year. What's at least as significant is his statement that Tesla operates its own bitcoin nodes as it shows the company - and its CEO - are committing even further to the cryptocurrency.
"Tesla accepting bitcoin payments and running its own Bitcoin nodes is massively bullish. Others will follow," trader and analyst Alex Kruger tweeted.
Musk's announcement comes two days after Federal Reserve's Chairman Jerome Powell called bitcoin a volatile speculative asset.
At press time, bitcoin is changing hands near $55,300, representing a 3.6% gain on the day. The cryptocurrency is trading higher despite the strength of the U.S. dollar in the foreign exchange markets. The dollar index (DXY), which tracks the greenback's value against majors, has risen to 92.52 – the highest level since Nov. 24.
The two assets have mainly moved in opposite directions since March 2020. However, the inverse correlation has weakened somewhat in recent days, with bitcoin trading steady above $50,000 amid the DXY's rise to four-month highs.
The cryptocurrency is now fast approaching a descending trendline hurdle, as seen on the chart below.
A breakout above the trendline hurdle would open the doors for a re-test of record highs above $61,000. On the downside, $53,000 is key support.
Also read: Bitcoin Transfer Worth $806M Might Reveal Big Institutional Purchase
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Exchange Review - March 2025
CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.
What to know:
Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.
- Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
- Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions.
- Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.
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What to know:
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