Bitcoin’s value saw a massive decline following Elon Musk’s tweet that mentioned they would stop accepting BTC as a form of payment for Tesla. The value of BTC went from $54,819 down to $45,700 in merely two hours after the tweet came live. The world’s largest known cryptocurrency saw a 17% decline in value, reaching its lowest value since March.
Bitcoin recovered half of the drop in value early in the Asian session, and last traded for about $51,099. Musk raised concerns about the increasing use of fossil fuel and the environmental cost of mining Bitcoin. He wrote, “we are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel”.
The reason for the massive decline in Bitcoin’s value resulting from Elon Musk’s tweet was mainly because bitcoin gained a huge part of its value after Musk decided to accept it in return for Tesla on February 8th.
Tesla might accept BTC if it shifts to an environmentally friendly mining process
After Elon Musk raised concern regarding the environmental cost of mining Bitcoin, he also mentioned that he will not be selling any Bitcoin and plans on resuming accepting BTC as a form of payment as soon as the mining process transitions into something more environmentally sustainable.
The announcement did come as a shock to a huge population, especially those who’ve invested in Bitcoin recently. However, there has been ongoing awareness regarding the impact mining has on the environment due to the massive energy cost that tags along with it.
The mining costs of cryptocurrencies are often questioned by critics and environmentalists. It has been reported by the University of Cambridge and the International Energy Agency that mining devours nearly the same amount of energy that the Netherlands did in the year 2019.
Dogecoin, Ethereum, and Cardano plunge alongside Bitcoin after Musk’s tweet
Bitcoin isn’t the only cryptocurrency that has struggled after Musk’s recent tweet; in fact, the entire crypto market has crashed. Dogecoin, which saw a huge rise in value and acceptance near Elon Musk’s appearance on Saturday Night live, also lost more than one-third of its value following Musk’s tweet.
Musk called Dogecoin a ‘hustle’ on the Saturday Night Live show. However, he also asked people whether they’d want Tesla to accept Dogecoin as a form of payment after BTC.
Jeffrey Wang, Vancouver-based head of Americas at Amber Group, stated that he didn’t find the plunge in cryptocurrency values surprising. His exact words were, “I don’t think everything is selling off just because of this news. This was kind of the straw that broke the camel’s back in terms of adding to the risk selloff.”
In contrast, cryptocurrencies that have shifted to environmentally sustainable practices are seeing a rise in value. As environmental awareness rises, cryptocurrencies are at risk of dissolving unless they shift to environmentally safe and sustainable practices. Elon Musk said it out loud, but many people have been raising awareness regarding the matter long before his tweet.