Musk’s Tweet Once Again Affected Bitcoin
The price of bitcoin jumped after Elon Musk said Tesla could accept bitcoin transactions again in the future. The latest development marks yet another example of large market moves following comments made by Musk.
The electric carmaker halted car purchases with bitcoin last month. The company made that decision due to the impact of cryptocurrency mining on the environment. It needs a lot of energy to fuel powerful computers.
As of 1:52 a.m. ET Monday, bitcoin rose 12.79% to $39,533.81. Since the start of the year, its price surged more than 30%, though bitcoin’s price is way off the all-time high of $64,829.14 hit in April.
Those gains came after Elon Musk said that Tesla would resume transactions once it confirms there is reasonable clean energy usage by miners. He was reacting to comments from Magda Wierzycka, CEO of South African asset manager Sygnia. Wierzycka said that Musk’s tweets on bitcoin prices were “market manipulation” and should have triggered an investigation by the U.S. Securities and Exchange Commission.
Elon Musk disputed Magda Wierzycka’s allegations of market manipulation. Musk stated that Tesla sold roughly 10% of bitcoin holdings. The company’s decision confirmed BTC could be liquidated easily without moving market according to Musk.
Bitcoin and its environmental impact
The environmental impact of bitcoin remains one of the most discussed topics. As part of its crack on the world’s largest cryptocurrency, China’s Inner Mongolia Region proposed punishments for companies involved in cryptocurrency mining.
The region’s tough stance on mining began in March when it announced plans to ban new cryptocurrency mining projects. Inner Mongolia also announced plans to close existing cryptocurrency projects. The region failed to meet Beijing’s energy use targets in 2019 and subsequently laid out plans to cut power consumption.
Apart from China, another country is trying to deal with issues created by cryptocurrency mining, and this country is Iran. The country’s government announced in May a ban on the mining of bitcoin and other cryptocurrencies until September 22.
A vast majority of the energy consumption from bitcoin mining is coming from illegal miners. That has lead to a nationwide crackdown on illegal cryptocurrency miners. Several months ago, Iranian police confiscated thousands of bitcoin mining machines that were using subsidized electricity illegally. The cryptocurrency miners consumed 95 megawatts per hour at cheap state-subsidized rates. Authorities also introduced temporary electricity cuts to legal cryptocurrency farms.
