Elon Musk’s tweets storm the cryptocurrency market
The internet goes crazy whenever an influencer like Elon Musk tweets something. His recent tweet rocked the world of cryptocurrency when he said Tesla would no longer accept Bitcoin as a form of payment for their cars.
Right after this tweet, the price of Bitcoin dived, along with another cryptocurrency, Dogecoin. Bitcoin’s price, for one, fell by 14% and reached just a little below $49,000 per coin. The price rebounded the following day, hitting a high of $50,000.
Tesla has an influence on the price of Bitcoin. Back in March, they announced that they bought $1.5 billion worth of the coin. They also said that they would accept Bitcoin as a mode of payment for their cars.
The Weight of Tweeting
So, how does this decision or tweet influence the market price of Bitcoin? Well, if Tesla is accepting Bitcoin, it only means that they believe in its legitimacy and value—why would they accept cryptocurrency if they are not sure that its value will rise, right?
Because of this confirmation of the coin’s value, people will want to stock up on it, and sellers will take advantage of this demand. Thus, increasing the price.
Dogecoin is another matter. After Elon’s tweet, the price dropped by 13%, pushing the coin to $0.37. The price decline continued even until Elon hosted an episode of Saturday Night Live. So, while Bitcoin rebounded the following day, Dogecoin did not.
Prices for Dogecoin moved back up Thursday of the following week. But, again, this price increase is something we can attribute to Elon’s new tweet.
In that tweet, he said that he is working with Dogecoin developers. The project is meant to help them improve the efficiency of transactions for Dogecoin. Right after he tweeted this, the price of Dogecoin started going up, hitting 55 cents per coin.
Why Did They Stop Accepting Bitcoin?
One question that lingers in a Bitcoin investor’s mind is this: why did Tesla stop accepting Bitcoin?
Elon said that Bitcoin is energy-intensive. It takes too much power to mine it. As such, Bitcoin miners are contributing to global warming since they use massive amounts of energy, and energy production comes from burning fossil fuels.
Overall, the entire industry of Bitcoin mining uses enough energy to power Argentina for a whole year. It happens because mining Bitcoin requires a lot of computer power. The backbone of Bitcoin is to solve mathematical problems that one can only succeed in doing with a specialized computer rig.
According to Elon, they will look into another kind of cryptocurrency that uses less than 1% of the power that Bitcoin uses. The aim is to help support a cryptocurrency without compromising environmental issues.
There are several kinds of cryptocurrencies out there—thousands of them. There surely are some options there that are less energy-intensive, and it seems like Elon is eyeing Dogecoin. These cryptocurrencies are not as popular or even as valuable as Bitcoin.
Elon clarified his position about cryptocurrency. He said that he believes in it. However, it must not drive an increase in the use of fossil fuels.
On the other hand, there are those that are not even worried about it. Some states like Montana, New York and Kentucky are pushing for Bitcoin mining. They want it in their states so they can give life back to their local coal power plants.
Many industries that require computers are now actively participating in “green campaigns. Companies in the casino industry, like casino GGBet, use servers that do not use 100% coal-powered sources of energy. They have technologies that allow them to get power but leave a lesser carbon footprint than how they used to be.