It’s another one of those weeks where Tesla and Elon Musk are dominating the markets. A few months ago it was big news when Tesla announced they would start accepting Bitcoin as a means of payment, and it’s news all over again now that they’ve done a 180! This tweet kicked off a new round of FUD about how much energy Bitcoin mining uses, which we’ll dive into, and MoneyGram is teaming up with CoinMe to double the number of locations where Americans can buy crypto in person.
The price of Bitcoin is all over the place right now. On Wednesday we were at $58,000 but all it took was a day and a half for the price to drop as low as $47,000, a decline of just under 20%. As of today we’re hanging out at around $50,000 and Bitcoin can’t seem to make up its mind whether it wants to go higher or lower.
Aside from a few technical analysts claiming that Bitcoin was overdue for a correction, there were two other obvious reasons that the price crashed.
The first was Tesla announcing that they would no longer accept Bitcoin as a means of payment. Since they put Bitcoin on their balance sheet Tesla has gained a lot of attention from Bitcoiners and the fact that they’ll no longer accept BTC was a blow to the community.
Secondly, we just witnessed a fairly large correction in the traditional markets. The S&P 500 dipped 4% in two day and the NASDAQ 6%. Those are rookie numbers in crypto land but a fairly big deal for the less volatile and much larger markets. There’s definitely not a 1-to-1 correlation between stocks and crypto, however, the crypto website Decrypt has shown that there is a strong correlation between large crashes in the equity markets which cause dips in the crypto market.
That’s probably what we’ve just seen now. Hopefully once the equity correction ends, and people move on from Tesla, the markets will right themselves, and we’ll get back to the steady climb higher.
Bitcoin’s energy appetite is a bit of FUD as old as time itself. The narrative becomes popular a couple of times a year, whenever the mainstream media needs to badmouth Bitcoin, and they can’t think of a more creative way to throw some shade. What’s different today is that instead of CNBC hating on Bitcoin it’s Tesla that’s causing the controversy. Remember we mentioned Tesla is no longer accepting BTC as a payment? Well, supposedly they’ve decided to ditch the orange coin because the network uses too much electricity and isn’t environmentally friendly.
While it’s true that if Bitcoin were a country it would be the 29th largest energy consumer, to put that into context the world’s most popular cryptocurrency only uses about 80% as much energy as the whole state of New York.
Furthermore, 75% of all crypto mining operations get some portion of their energy from renewable sources and 40% of all the energy that’s used to mine crypto comes from renewable providers.
What makes this story strange is that absolutely nothing about Bitcoin’s fundamentals have changed. Tesla started accepting BTC three months ago when Bitcoin was using just as much energy as today. Yet for some reason Tesla has now decided that Bitcoin isn’t green enough, and they don’t want to be associated with it? Why even accept it in the first place then? Something just doesn’t add up here. We’ll stay on this story as the facts emerge, and we wouldn’t be surprised if there is something else going on behind the scenes.
Why do you think Tesla really stopped accepting Bitcoin? Let us know in the comments below.
Got some cash? Would you rather have Bitcoin? MoneyGram is teaming up with CoinMe to double the number of locations where Americans can buy BTC with cash. Here’s how it works. MoneyGram has thousands of kiosks in locations all across the United States, typically based in stores like CVS, Walgreens and Wal-Mart. By the end of May MoneyGram is going to enable cash purchases of Bitcoin at about 12,000 of these locations, and cash purchases at 20,000 of its kiosks by the end of the year.
What’s the next chapter in the Elon Musk story? The last we’ve heard from Elon is that he’s, quote, “Working with Doge devs to improve system transaction efficiency. Potentially promising.” Which has me scratching my head a bit because Doge devs are actually Bitcoin devs who’s code was mostly copy a pasted into Doge and any significant activity literally stopped in 2017. In fact the last significant commit on the code was about 3 months ago.
Does that mean Tesla is going to start accepting Doge coin? Is Bitcoin yesterday’s news? Who the heck knows, at this point anything feels possible.