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However, Elon noted that Tesla will not sell the existing Bitcoin investment as they plan to use it once the mining shifts to renewable and greener energy sources.
Bitcoin price slid as much as 15%, below $50,000, after Elon Musk halted Tesla Inc (NASDAQ: TSLA) purchases with the cryptocurrency due to environmental concerns. The asset shed over 10k in a few hours, with over $365 billion wiped out in the liquidation. Consequently, almost the whole cryptocurrency market was affected by the announcement that was a huge bombshell to the industry amid a bull market.
“Tesla has suspended vehicle purchases using Bitcoin. We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk noted.
According to him, although the cryptocurrency market is a noble idea with great prospects, its success should not override environmental protection. However, Elon noted that Tesla will not sell the existing Bitcoin investment as it plans to use it once the mining shifts to renewable and greener energy sources.
“Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy.
We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction,” he explained.
Bitcoin and Tesla CEO Elon Musk
The announcement sparked a heated debate over Bitcoin’s environmental impact in comparison with other digital assets. Additionally, others were keen to note the environmental impact caused by Tesla as it acquires its raw materials from mining.
Ripple CEO Brad Garlinghouse was quick to point out that the Bitcoin network requires some changes in favor of the environment.
Let’s not overthink this..few people have changed the world the way @ElonMusk has. No doubt that BTC is here to stay – but denying there is a problem isn’t a path to solving it. Whether it’s through renewables or architectural changes, let’s keep moving on the solution. https://t.co/Ic0Ct6gEKt
— Brad Garlinghouse (@bgarlinghouse) May 12, 2021
While the debate over Bitcoin energy consumption continued, notable crypto investors were quick to buy the dip. “I bought the dip. Thanks, Elon,” said Morgan Creek Digital founder, Anthony Pompliano. “Elon didn’t sell his Bitcoin. He and I are both still long. Same team,” wrote he.
Musk later reiterated by showing an astronomical rally in energy consumption over the past few months caused by Bitcoin mining. The debate over Bitcoin mining energy consumption has been ongoing in the past years. With Tesla’s inclusion of Bitcoin on its balance sheet earlier in the year, the move was criticized since the company is on the other hand manufacturing electric vehicles.
Bitcoin price had partly recovered the losses although still in the dip. From a technical point of view, the asset rebounded from the 200 MA daily chart. Should the asset rally beyond this point in the coming weeks, the correction will be nullified and the bull market upheld. However, should the asset dip below the daily 200MA, higher chances of more correction will loom around.