Elon Musk, the founder of Tesla Inc and the world’s second-richest person, shocked cryptocurrency enthusiasts on Wednesday, when he announced on Twitter that his automaker would no longer accept Bitcoin payments due to environmental concerns.
After all, this is the same man who claimed just a few months ago that Tesla had made a $1.5 billion Bitcoin investment. He responded with “True” to a thread citing Ark Investment Management LLC research, suggesting that mining the token could potentially boost renewable energy adoption. Bitcoin mining is considered to be energy-intensive, with the industry valuing low-cost, abundant power supplies. Bitcoin fell as low as $46,000 before regaining its footing. On Thursday, at 2:45 p.m. in Hong Kong, it was down 6.4 percent to $51,039 dollars. Here’s what some crypto experts have to say about it:
Are you up for new highs?
“This may be the selloff that propels Bitcoin to new all-time highs,” Fundstrat Global Advisors LLC’s David Grider predicted. “We believe the news is exaggerated, and we wouldn’t be shocked if Tesla is hinting at proposals to make cryptocurrency more environmentally friendly.” Grider said Bitcoin has been consolidating for months as its market supremacy has waned, but he’s still bullish, with a target of $100,000, in a note published on Wednesday.
In search of an answer
Investor Michael Terpin said, “The most plausible response is that he’s under strain” from people who believe “that one can’t be green and own crypto.” “For starters, sending Bitcoin consumes almost no electricity, and mining new coins to keep the network stable consumes even less energy (70 percent of which comes from renewable sources) than mining gold or powering global banking systems.”
Keeping an eye on other cryptos
Some analysts speculated that Musk might be aiming to lift a competitor coin with a greener, or even fluffier profile. Billy Markus, the co-creator of Dogecoin — the Shiba Inu-themed cryptocurrency that began as a joke in 2013 — had one of the most famous Twitter responses to Musk’s initial comment. Musk’s favourite token has been a hit with investors and enthusiasts alike. “If only there was a merge-mined cryptocurrency with a far lower carbon footprint than Bitcoin and a dog on it,” Markus said.
This doesn’t add up
In an email, Vijay Ayyar, head of Asia-Pacific at Luno Pte., said, “Broadly it’s a bit surprising given Tesla bought Bitcoin for their treasury in January, and the logic is the same if you’re using Bitcoin as a store of value or for transactional purposes.” “As a result, something isn’t adding up. There are usually unknown motivations at work in such cases.”
There’s no way
Some people’s reactions were almost incredulous. In response to Musk’s post, Yassine Elmandjra, a crypto analyst at Ark, wrote, “Tell me your account got hacked without telling me your account got hacked.” Chance to Purchase “In retrospect, it was a perfect buying opportunity,” remarked Cameron Winklevoss, co-founder of Gemini Trust Co LLC and lifelong crypto enthusiast.
In Asian trading on Thursday, bitcoin bounced back to about $50,000 after plummeting as much as 17% after Elon Musk tweeted that Tesla Inc would no longer allow bitcoin for vehicle purchases due to environmental concerns. Within just two hours after the tweet shortly after 2200 GMT, the price of the world’s largest cryptocurrency fell from about $54,819 to $45,700, its lowest level since March 1. Early in the Asian session, it recovered about half of the loss, and was last trading at $50,196. Ether, the world’s second-largest cryptocurrency, followed suit, falling 14% to $3,550 before recovering to about $3,965. “We are concerned about the increasingly growing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the highest emissivity.”
