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Elon Musk Pokes Massive Hole in the Bitcoin Market After Halting Bitcoin Payments at Tesla

Bitcoin

zycrypto.com 13 May 2021 04:29, UTC
  
Reading time: ~4 m

Elon Musk left the Bitcoin ecosystem in shambles when he, in his most recent tweet revealed that his electric vehicle company Tesla, would no longer be accepting car purchase payments in Bitcoin.

The new development came as a shock to the community as Tesla had only introduced the asset as a payment medium on the 24th of March. It may appear that the company did not carry out their research thoroughly as Musk affirmed that the level of energy consumed by Bitcoin puts a dent on the asset’s usefulness as a sustainable technology.

Excerpts from Musk’s post reads “Tesla has suspended vehicle purchases using Bitcoin. We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions.” Although Tesla added that it will not be selling Bitcoins under its possession, the company is on a search for a more sustainable digital asset. Preferably one that uses less than 1% of Bitcoin’s energy.

Tesla & Bitcoin pic.twitter.com/YSswJmVZhP

— Elon Musk (@elonmusk) May 12, 2021

Elon Musk’s impact on the Bitcoin market

At the time of this writing, over $575.5 million worth of Bitcoin has been liquidated in less than an hour, reflecting the impact of the news on the Bitcoin market, which Elon Musk evidently influences. Bitcoin, which was still in the process of gathering the much-needed momentum to surpass its daily high of $57,511 has dropped by 13% to now trade at $50,112 at report time.

BTCUSD Chart By TradingView

It is crucial to note that Bitcoin is not the only asset suffering from Musk’s announcement. Other altcoins have retreated and lost daily gains in the last few hours. Leading altcoins like Ethereum, Binance Coin, and even DOGE have dropped above 9% in the last hour.

Bitcoiners boycott Tesla. Will Tesla reconsider accepting Bitcoin?

So far, the new development has been met by a number of mixed reactions from the cryptocurrency space. The Bitcoin market is currently bleeding, but it is also possible that Tesla’s sales will bleed in the near term as Bitcoiners, some of which include Bitcoin Stock to Flow creator Plan B, and Bitcoin proponent Samson Mow, disclose their disappointment and resort to boycotting Tesla.

Many Bitcoiners were supporters and advocates for Tesla early on. Elon making uneducated comments to FUD #Bitcoin will have financial consequences. I'm not sure I would ever buy another Tesla product again.

— Samson Mow (@Excellion) May 13, 2021

So Elon never really understood #bitcoin, never understood proof-of-work. His Doge pump was a warning sign. His turning to other "crypto" is confirmation. No more Tesla for me. https://t.co/wPzE3eEF68

— PlanB (@100trillionUSD) May 12, 2021

Meanwhile, many Bitcoiners insist that Musk could reconsider accepting the cryptocurrency as he only noted that it was suspended and not banned from future consideration.

What altcoins will make the cut at Tesla?

As Tesla sets out to consider other cryptocurrencies that run on less than 1% of Bitcoin’s energy, Crypto fans propose fitting candidates, pointing at Dogecoin, which happens to be Musk’s favorite cryptocurrency. Interestingly, Musk recently conducted a poll asking if users wanted Tesla to accept Doge, hinting that plans to suspend Bitcoin may have already been in the works for a while now.

However, it seems that Tesla will be stuck between a rock and a hard place as other currencies consume an incredible amount of energy like CZ notes below.

Elon probably did not research how much energy is required to run other (non crypto) currencies that Tesla accepts. 😂 https://t.co/oSwfIBoOsD

— CZ 🔶 Binance (@cz_binance) May 13, 2021

Like Anthony Pompliano tweeted in response to Musk, over 50% of miners depend on reliable energy.

Elon … you realize that 75% of miners use renewable energy, right?

This energy story has been debunked over and over again.

— Pomp 🌪 (@APompliano) May 12, 2021

While the way forward is still unknown, a handful of Bitcoiners are more focused on the buying opportunity Musk has created for them as they begin to tap into the dip by accumulating more Bitcoins.


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