Bitcoin sinks after Elon Musk’s tweet on his changing stance of using the cryptocurrency as payment for Tesla.
It’s interesting to see how one single person can move the market time and again. Well, Musk just did it again with the cryptocurrency market.
In his latest Twitter post, Musk pointed out his concerns about how the energy intensive process of mining Bitcoin is detrimental to the environment. And this caused a big movement in the crypto market.
Bitcoin sinks: Tesla Will Not Accept Bitcoin For Car Purchases
Most importantly, he said that Tesla will no longer be accepting Bitcoin for car purchases. This is what shocked the market. Because the company just build up $1.5 billion worth of Bitcoin on its account recently. A move for Tesla to get ready to accept Bitcoin as payment for its cars.
Given the high expectations the market has on Tesla to dominate the electric vehicles (EVs) sector, we can understand why scrapping the use of Bitcoin for its transactions will taper the sentiment for the crypto unit.
As a result, the price of Bitcoin shedded 13% after hours. Many other cryptocurrencies faced similar downward pressure as well.
Musk’s Concern of Environment Impact of Bitcoin Mining
Source: Twitter / Elon Musk
In his own words, Musk said that, “Tesla has suspended vehicle purchases using Bitcoin”. This is in relation to the concern about the “rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
While Bitcoin sinks, many are delighted by Musk’s recent support of Dogecoin. But it did not buck the trend of the falling Bitcoin. In fact, Dogecoin saw a 20% dive, together with other major cryptocurrencies like Ethereum and Litecoin following Musk’s announcement.
Many major banks have started to integrate the increasingly popular cryptocurrency as an investment instrument. However, many investors are still staying away from it. For instance, legendary investors like Warren Buffett are still skeptical of this digital currency.
As Buffett once puts it, “It’s not a currency. It does not meet the test of a currency. I wouldn’t be surprised if it’s not around in 10 or 20 years. It is not a durable means of exchange, it’s not a store of value.”
On the other hand, Musk did not ditch the coin entirely, at least for now. He added in his tweet that “we intend to use it as soon as mining transitions to more sustainable energy.”
In fact, he also mentioned that they are looking for other cryptocurrencies that have much lesser environmental impact for the time being.
While Bitcoin sinks, does it present an opportunity for the investment community to hunt for the next hot coin?
Well, who’s right? Only time will tell.
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