Cryptocurrency markets observed a little bit of a shakeup this week soon after Tesla Founder and Main Government Elon Musk abruptly declared that the organization would no extended be accepting Bitcoin payments, citing environmental issues.
“Cryptocurrency is a fantastic concept on a lot of ranges, and we believe it has a promising long term, but this are unable to appear at excellent charge to the surroundings,” Musk wrote. “[…] We are worried about fast increasing use of fossil fuels for Bitcoin mining and transactions, primarily coal, which has the worst emissions of any gasoline.”
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May perhaps 12, 2021
At the finish of the announcement, Musk also pointed out that Tesla is “looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.” Several hours later, he followed up with another tweet: “To be clear, I strongly believe in crypto, but it can’t drive a massive increase in fossil fuel use, especially coal.”
To be clear, I strongly believe in crypto, but it can’t drive a massive increase in fossil fuel use, especially coal
— Elon Musk (@elonmusk) May 13, 2021
The announcement sent off shockwaves of sales across crypto markets. As the clear subject of the message, Bitcoin seems to have been affected the most.
Less than 24 hour after the tweet was posted, the Bitcoin’s price plunged approximately 17 percent, falling from roughly $58K to $49K. While the price of BTC seems to have stabilized, the asset has not managed to fully recover its losses at press time, BTC was sitting just below the $50K mark.
Tesla’s Rejection of BTC Could Reinforce Public Perception of BTC as an Energy-Gluttonous Beast
While Musk clarified that Tesla would not be selling any of the 38,300 BTC that it holds on its balance sheet, the announcement seemed to present a clear tonal shift in Tesla’s attitude toward the cryptocurrency.
While BTC is increasingly understood to be a store-of-value or “hedge against inflation” asset, Bitcoin cannot seem to shake its reputation as an energy-hungry, carbon-intensive network.
Just last month, the New York Times published a piece that exclaimed, “[Bitcoin] accounts for so little of the world’s total transactions, yet has the carbon footprint of entire countries.” Additionally, Ars Technica reported last month that a private equity firm revived a defunct coal-fueled power plant to mine BTC the Washington post recently reported that the Iranian government blamed a large power outage on Bitcoin miners.
While certain factors, including the usage of renewable energy in Bitcoin mining, have put the facts about Bitcoin’s carbon footprint up for debate, Bitcoin is still seen by much of the general public as problematic. Therefore, it seems fairly logical that Tesla, which is famous for producing low-emission, “sexy” electric cars, would take a step back from BTC in order to maintain an image of sustainability.
Still, the Bitcoin community pushed back on Tesla’s claim that the Bitcoin network’s fossil fuel consumption was “rapidly increasing.”
— Elon Musk (@elonmusk) May 13, 2021
“Elon … you realize that 75% of miners use renewable energy, right? This energy story has been debunked over and over again,” wrote Anthony Pompliano, Founder of Pomp Investments, in reply to the announcement. Indeed, last month, Ark Investments claimed that 76 percent of Bitcoin miners use renewable energy. To date, no comprehensive scientific study has been conducted to measure exactly what the carbon footprint of the Bitcoin network is.
But, just as Tesla championed the acceptance of Bitcoin earlier this year, and perhaps inspired other corporations to come into the fold, could its step away from BTC lead other corporations to take some distance from Bitcoin?
There does not seem to be much evidence of this, at least, not yet. However, if Tesla adopts ‘other cryptocurrencies’ that have lower rates of carbon consumption than BTC, crypto-curious companies and institutions may follow in its footsteps.
Will Tesla Accept Dogecoin (DOGE)?
Indeed, Elon Musk’s declaration that Tesla was exploring “other cryptocurrencies that use <1% of Bitcoin’s energy/transaction” has led many in the crypto community to speculate on which coins could be in the lineup.
The crypto industry is pure chaos right now.
– Elon can’t make up his mind
– Saylor is gobbling up bitcoin
– Coinbase listing Doge
– Every shitcoin pumping
– Mainstream media confused
– Central banks printing non-stop
– Institutions pouring cash in
— Pomp 🌪 (@APompliano) May 13, 2021
Given Elon Musk’s apparent fixation on Dogecoin (DOGE), the coin may seem like the most obvious choice. Musk even published a Twitter poll on Wednesday asking the public whether or not Tesla should start to accept DOGE as payment nearly 80 percent of respondents said ‘yes.’
Do you want Tesla to accept Doge?
— Elon Musk (@elonmusk) May 11, 2021
On Friday, Musk tweeted that he was “working with Doge devs to improve system transaction efficiency. Potentially promising.” The price of DOGE appeared to jump in the wake of the Tweet. In the 24 hours before press time, DOGE was up roughly 35 percent.
However, some crypto community members seem to be growing suspicious of Musk’s intentions with DogeCoin. “Name these developers. The world is very curious,” author, Preston Pysh tweeted in reply. “…Or is this another ‘Developers Secured’ tweet?”
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Crypto market place analyst, Michael van de Poppe wrote, “Can you just prevent tweeting?”
Cardano (ADA) Price Surges to a New All-Time Higher after Cardano Basis Asks Elon to “Get Your Persons to Converse to Our People.”
So far, analysts are next the revenue. When the price tag of Bitcoin crashed, the selling prices of lots of other best-10 cryptocurrencies fell on the get of 5 to ten p.c. However, ADA, the indigenous token of the Cardano network, has hit a new all-time substantial, primary some to speculate that ADA could be a strong contender for Tesla payments.
Indeed, after Musk posted his announcement, the Cardano Basis tagged him in a tweet, inquiring him to “get your men and women to talk to our people today.”
Cardano x Tesla: An clear match? 🤔
— Cardano Basis (@CardanoStiftung) May perhaps 13, 2021
Because then, ADA supporters have jumped on the #Tesla4ADA movement like mad.
Get this hashtag trending -> #Tesla4Ada
— Rick McCracken DIGI (@RichardMcCrackn) May possibly 13, 2021
Nevertheless, other enthusiasts of ADA would relatively that the cryptocurrency community retains its distance from Elon Musk. A Twitter person with the take care of @CryptoNelson17 wrote that: “While I would enjoy [Tesla to accept ADA] from a utility-standpoint, I sense like @elonmusk is a little bit unstable & it could harm $ADA by some means,” he wrote.
“I imply consider this ‘no longer obtaining teslas with $BTC’ thing – you’re telling me Elon didn’t know it was not environmentally friendly? He’s a kid in a sweet retail outlet, taking part in (sic).”
I suggest take this ‘no for a longer period puchacing teslas with $BTC’ issue – you’re telling me Elon did not know it wasn’t inexperienced? He’s a child in a sweet retail store, actively playing
— Tyler Nelson (@CryptoNelson17) May 13, 2021
Could XRP Be Tesla’s Future Payment Coin?
The XRP local community has also been vying for Elon’s attention. Even though Ripple Labs seems to have stayed silent on the issue, XRP holders ended up swift to issue out that the Ripple network promises to have a person of the cheapest carbon footprints of any blockchain on the current market.
— Razvan Stanciu (@RazvanStanciu9) May perhaps 13, 2021
Crypto analyst Mr. Whale (@CryptoWhale) tweeted, “Elon Musk says Tesla is searching for cryptocurrencies that use less than 1% of Bitcoin’s electrical power intake. Fantastic thing $XRP utilizes a lot less than .001% of Bitcoin’s electrical power and only fees $.0000136 for each transaction.”
Elon Musk says Tesla is on the lookout for cryptocurrencies that use less than 1% of Bitcoin’s electrical power use.
— Mr. Whale (@CryptoWhale) Might 13, 2021
David Gokhshtein, the Founder of Gokhshtein media, also tweeted that he could “see Elon acquire $XRP on as payment for Tesla products.”
I could also see Elon take $XRP on as payment for Tesla goods.
— David Gokhshtein (@davidgokhshtein) May 13, 2021
Nonetheless, just as inside the DOGE and ADA communities, some XRP users ended up not also content about the concept of Elon Musk publicly embracing XRP.
Twitter consumer @Beat_Diem wrote, “I do not actually want Elon inside XRP, I really don’t want a manipulated current market. “
“We want adoption. It’s so simple to fork out for a Tesla with bitcoin utilizing BitPay or any other crypto debit card even if Elon doesn’t want it. This is genuinely silly. (sic)”
What are your feelings on Tesla’s choice to stop accepting BTC payments? Which cryptocurrencies could Tesla acknowledge instead? Permit us know in the feedback below.