The change of Tesla CEO Elon Musk, one of the strongest believers in cryptocurrencies, shocked investors and caused prices to generally fall.
Elon Musk, CEO of Tesla Inc., doubled the attack on Bitcoin’s energy demands and called recent consumption trends “crazy”.
Musk posted a chart on Twitter from Cambridge University showing that Bitcoin’s electricity consumption has skyrocketed this year. It is the second day he has criticized cryptocurrency mining for the use of fossil fuels and comes after the announcement that Tesla would suspend car purchases via Bitcoin.
The change of one of the strongest believers in cryptocurrencies surprised investors and caused prices to fall generally. Bitcoin fell 15% at some point below $ 50,000 during Thursday’s session. The exchange operator Coinbase Global Inc. it sank to 5.3% and other tokens, including Ether and Dogecoin, fell.
– Elon Musk (@elonmusk) May 13, 2021
“Bitcoin is also a manifestation of the value of the Internet, and so it makes sense that social media and celebrity worship will have, and will continue to have, an effect on demand,” said Stephen Kelso, head of ITI Capital markets.
Witness mining consumes 66 times more electricity than at the end of 2015, according to a recent report from Citigroup Inc.
Musk noted Wednesday that Tesla could accept other cryptocurrencies if they consume less energy and said the company will not sell any of its Bitcoin.
It’s unclear what motivated the decision, and Musk and Zachary Kirkhorn, Tesla’s chief financial officer, did not immediately respond to an email query for comment. Kirkhorn, in March, added the title “Master of Coin,” according to a regulatory record.
Still, Musk’s tweets raise doubts about the appeal of Bitcoin as an investment at a time when institutional companies are increasingly vocal about climate change and environmental issues.
“Surely you would have done your due diligence before accepting Bitcoin?” said Nic Carter, founding partner of Castle Island Ventures, and a leading voice among proponents of Bitcoin’s energy use. “Very strange and confusing to see this quick investment.”
Musk’s decision in February to buy $ 1.5 billion in Bitcoin and plan to accept it as a form of payment has been a major catalyst in the crypto market. In the eyes of analysts, it helped add legitimacy to the testimony and introduce new investors.
Musk’s cryptographic tweets have often been jokes, and his attention to Dogecoin brought the joke witness to the mainstream. In the past, he said he was the “Father Dog” and tweeted Tuesday, “Do you want Tesla to accept Doge?”
But their Twitter posts can be a problem for many investors because they tend to drive stock prices and cryptocurrencies. Take, for example, its February 8 disclosure that Tesla invested $ 1.5 billion in Bitcoin.
The currency, which was trading at about $ 38,600 the day before, rallied more than 15% after the announcement, adding about $ 135 billion in market value. His latest tweet, however, erased about $ 100 billion in a matter of hours, according to CoinMarketCap.com data.
“Musk interprets the memoirs‘ How to Lose Friends and Alienate People, ’” said Antoni Trenchev, managing partner and co-founder of Nexo in London, a cryptocurrency lender.
“The community now has to work even harder to drive the renewable mining narrative. The history of Bitcoin has taught us that the path to universal acceptance is not without obstacles; this will probably be the biggest ”.