Tesla CEO Elon Musk revealed on Twitter a few days ago that his company will no longer accept bitcoin payments for electric cars. The announcement came just as suddenly as the revelation earlier this year that Tesla had purchased bitcoin and planned to support bitcoin payments. And just like Musk’s previous takes on cryptocurrencies, it had a massive effect on the market. But this time around, Musk’s tweets were not beneficial for bitcoin, instead tanking the price to around $45,000 as of the time of this writing.
Musk’s sudden realization that bitcoin might not be eco-friendly to mine caused immediate panic, and the price dropped from around $54,000 to $46,000. Bitcoin rebounded soon after that to top $52,000. But then Musk continued tweeting over the weekend. He made several remarks against bitcoin and in favor of dogecoin, thus tanking bitcoin’s price even further. The coin dropped to a low of around $42,000, a level unseen since mid-February.
Musk’s criticism of bitcoin took down most of the crypto market, with few coins being able to resist the panic. Bitcoin was trading at around $45,000 for a coin at the time of this writing, still well below last week’s levels.
After Musk revealed that Tesla would no longer accept bitcoin payments, he said on Twitter that he’s working with dogecoin’s developers to improve doge efficiency. The coin that started as a meme several years ago saw massive adoption as many speculators started purchasing the token after Musk promoted it on Twitter. Doge rose from under 5 cents in early 2021 to a high of around 70 cents per coin a week ago. The price is hovering around 50 cents at the time of this writing.
Musk saw plenty of pushback on Twitter for his opinions related to bitcoin energy efficiency and doge, and he did not appear to appreciate the criticism.
Obnoxious threads like this make me want to go all in on Doge
— Elon Musk (@elonmusk) May 16, 2021
“Obnoxious threads like this make me want to go all-in on doge,” Musk said in response to someone saying that he has been acting like a perfect troll. He also offered a vision on improving dogecoin transaction speed and fees in other comments on Twitter.
Ideally, Doge speeds up block time 10X, increases block size 10X & drops fee 100X. Then it wins hands down.
— Elon Musk (@elonmusk) May 16, 2021
Musk again drew criticism for his approach to fixing the doge problem:
For those bad at math 👆, 100X higher transaction volume with 100X lower fees means total fees earned stay same. Low fees & high volume are needed to become currency of Earth.
— Elon Musk (@elonmusk) May 16, 2021
Musk also addressed bitcoin’s “centralization” problem, saying that many mining companies operate from China. He linked to a story from a few weeks ago that showed how a flooded mine in China led to a massive drop in bitcoin computing power.
Bitcoin is actually highly centralized, with supermajority controlled by handful of big mining (aka hashing) companies.
A single coal mine in Xinjiang flooded, almost killing miners, and Bitcoin hash rate dropped 35%. Sound “decentralized” to you?https://t.co/Oom8yzGRNQ
— Elon Musk (@elonmusk) May 16, 2021
The Tesla exec went as far as to remind people that his days at PayPal qualify him to talk about how money works.
Hey cryptocurrency “experts”, ever heard of PayPal? It’s possible … maybe … that I know than you realize about how money works.
— Elon Musk (@elonmusk) May 16, 2021
He also offered a simple “indeed” response when someone suggested that Tesla will likely dump all of the bitcoin it bought. It’s unclear how investors might react to Tesla unloading all of that bitcoin after Musk singlehandedly tanked its value.
Indeed
— Elon Musk (@elonmusk) May 16, 2021
Musk later clarified that Tesla had not sold any bitcoin, but the harm was already done. Bitcoin had lost over $10,000 in value since Musk started tweeting about its impact on the environment a few days ago.
To clarify speculation, Tesla has not sold any Bitcoin
— Elon Musk (@elonmusk) May 17, 2021
The entire market was in the red in early Monday’s trading, with very few exceptions. High volatility remains a key characteristic of crypto trading, so anything can happen.
