Crypto fans were shocked early this morning when Elon Musk announced on Twitter that Tesla would stop accepting Bitcoin payments due to environmental concerns.
Meanwhile, just a few months earlier, Elon Musk himself had said that Tesla bought $1.5 billion in Bitcoin.
When Cathie Wood’s Ark Investment Management cited a report on Twitter that Bitcoin mining can indeed consume large amounts of renewable energy, the billionaire replied, “Yes.”
The Bitcoin U-turn announcement of the Tesla boss immediately pulled the price of Bitcoin down to $ 46,000 / dong.
What do cryptocurrency experts say?
Minutes later, billionaire investor Mark Cuban – the owner of the NBA’s Dallas Mavericks – tweeted: “We know that replacing Gold as a store of value will help the environment… shrinking big bank and coin usage will benefit society and the environment.”
However, the Winklevoss twin billionaire brothers remain optimistic.
Cameron Winklevoss said Musk will return to Bitcoin after realizing that cryptocurrency mining “is pushing the renewable energy industry forward.” His brother Tyler also encouraged investors to catch the bottom.
Cameron Winklevoss, the co-founder of cryptocurrency exchange Gemini Cameron, tweeted: “In retrospect, it was a great buying opportunity.”
Some people working in the crypto space also think the issue is overblown. According to them, the drop is the right time to buy.
According to David Grider of Fundstrat Global Advisors, this could be a sell-off that could push Bitcoin to new highs. “We think the news is overblown and wouldn’t be surprised if Tesla is signaling plans to make crypto ‘greener’,” he said.
In a note Wednesday, Grider said the Bitcoin price has eased, but he remains bullish on a future $100,000 price point.
Meanwhile, crypto billionaire Mike Novogratz still encourages investors to buy Bitcoin. He thinks Musk is just trying to use his influence to make cryptocurrency mining “greener.”
Looking for the answer to the Bitcoin U-turn
“The most logical answer is that he’s feeling pressure” from people who think “that one can’t be green and own crypto,” said investor Michael Terpin.
“First, there’s virtually no energy expending in SENDING Bitcoin; and the mining of new coins to keep the network secure is still a far lower amount of energy (and 70% of it from renewable sources) than the amount of energy expended to mine the world’s gold or power the global banking systems,” he added.
However, for some, Elon Musk’s move is only adding to the suspicion. Yassine Elmandjra, the crypto analyst at Ark, said in a reply to Musk’s tweet: “Tell me your account got hacked without telling me your account got hacked.”
Follow other cryptocurrencies
Musk isn’t completely turning his back on cryptocurrencies. In his announcement to stop accepting Bitcoin payments, he admitted that cryptocurrency is still a good idea. Musk is also looking at other coins that use less energy.
Some other experts think that Musk will most likely aim to promote a different digital currency than mining with green energy. One of the most likes on Twitter after Musk’s statement came from Billy Markus – co-founder of Dogecoin.
“If only there was a merge-mined cryptocurrency that had a much smaller carbon footprint than Bitcoin, and also had a dog on it,” Markus said.
Many billionaires and investors do not support Elon Musk’s sudden move towards Bitcoin.
They criticized the Tesla boss for being “callous” and “playing with people’s pockets.”
“Selfish and callous”
Just last month, Musk voiced his support for an article called “The Bitcoin Clean Energy Initiative” by Square Crypto. The article refutes the argument that the Bitcoin network causes serious environmental damage and destroys the planet.
According to the article, Bitcoin mining will encourage increased use of renewable energy, replacing carbon-emitting fossil energy. Musk quickly shared the post on Twitter and commented: “Yes.”
According to Bloomberg, Musk’s bitcoin U-turn has shocked many crypto fans. Nic Carter, an expert at Castle Investment Management, described his move as “very odd and confusing.”
Oluwafisayo Williams, 32, a doctor in Sheffield (England), was even harsher. Williams used the words “selfish and callous” to describe Musk’s heart.
He started pouring money into cryptocurrencies at the beginning of the year. “If Bitcoin is bad for the environment, we should ask Elon about the carbon footprint of his SpaceX rocket,” Williams wrote in a message. “I don’t think Elon spent time studying Bitcoin. It’s either that or he is exploiting his power to control the market,” Williams criticized.
However, Williams does not care about Musk’s views and insists he is still optimistic.
On April 26, Tesla reported a record profit of $ 438 million in the first quarter. As usual, the profit was made by selling emissions limits. However, the company’s Bitcoin sale also contributed $101 million to the profit.
According to the report, Tesla recorded $1.5 billion in “digital asset” purchases and $272 million in digital asset sales in the first quarter. The firm said Bitcoin sales contributed up to 101 million USD. As such, the company promptly sold some Bitcoin and made a profit of 101 million USD when the Bitcoin price skyrocketed.
“Playing with people’s futures, their fortunes”
Meanwhile, Brash Barstool Sports founder Dave Portnoy, who has built a following among retail investors, wasn’t pleased by Musk’s move. In a video, he said that the billionaire changing stances so quickly is “playing with people’s futures, their fortunes.”
Aaron Smith, 29, a trader based in Essex (UK), has moved most of his portfolio to cryptocurrencies. He thinks that the Tesla boss needs to learn more about cryptocurrencies.
Smith remains bullish on cryptocurrencies and considers Musk’s backing as shocking news. “Billionaires are influential in all markets. Not just crypto,” Smith said. “But you see a quicker reaction in crypto because the market cap is smaller.”