Ever since Bitcoin was introduced in 2009, the graph of digital assets has been quite successful. Today, the cryptocurrency space holds a global market cap of $2 trillion. The global acceptance of the crypto space has skyrocketed during the pandemic year 2020, and the upward trajectory continues. There is a survey of conventional investors on adopting Digital Assets almost every day. According to the RIA Digital Assets Council, while 80% of financial advisors get queries about bitcoin from customers, only 8% can accurately describe digital assets. Moreover, the need for financial advisors to develop expertise in cryptocurrency is quite crucial, as it becomes more common. Therefore, with so much happening in one of the most happening industries in the world, how could the second-richest man in the world miss out on the action? That’s right! Tesla and SpaceX CEO Elon Musk has left no stones unturned to show his influence over the crypto industry. No one is unaware of the fact that Elon Musk is a big-time crypto supporter. Elon Musk often takes it to Twitter to show his support for digital assets like Bitcoin and Dogecoin. His one tweet turns the crypto space upside-down. In contrast, Bitcoin dropped as much as 17%, after Musk announced on Twitter his decision to suspend its use for Tesla cars, a month after announcing to accept bitcoin as payment for Tesla. And recently, the price of Dogecoin soared after Musk tweeted that he was working with Dogecoin developers to improve the efficiency of transactions. On the contrary, developers say they had been working with Elon Musk since 2019. Despite this fact, Musk continues to make such ineffective decisions that are affecting the crypto market. Hopes Annihilated as Tesla Puts Bitcoin Purchases on a Halt The price of the world’s largest cryptocurrency fell from about $54,819 to $45,700, its lowest level since March 1, after Elon Musk said Wednesday on Twitter that Tesla has “suspended vehicle purchases using bitcoin,” out of concern over “rapidly increasing use of fossil fuels for bitcoin mining.” Other cryptocurrencies, such as Ethereum, dropped before regaining some ground in Asian trade. Tesla disclosed in a February SEC filing that it purchased $1.5 billion in bitcoin and that it would invest in more bitcoin or other cryptocurrencies in the future. At the time, the company stated that it would begin accepting bitcoin as payment for its goods. Musk said: “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.” Tesla intends to keep its Bitcoin assets and use the cryptocurrency until mining shifts to more renewable energy sources, according to Musk. Bitcoin is produced when powerful computers compete against each other to solve complex mathematical puzzles, an energy-intensive process that currently relies heavily on electricity generated with fossil fuels, especially coal. At today’s costs, Bitcoin “mining” consumes about the same amount of energy each year as the Netherlands did in 2019, according to the most recently available information from the University of Cambridge and the International Energy Agency. Elon Musk Is a Strong Believer of Crypto, But Not at the Cost of the Environment The use of Bitcoin to purchase Tesla’s electric vehicles revealed a contradiction between Musk’s image as an environmentalist and his use of his popularity and status as one of the world’s richest people to back cryptocurrencies. Some Tesla investors, as well as environmentalists, have been increasingly critical of the way Bitcoin is “mined,” which requires massive quantities of electricity produced using fossil fuels. “Cryptocurrency is a good idea on many levels, and we believe it has a promising future, but this cannot come at great cost to the environment,” he tweeted. Tesla shares fell 1.25% after hours. As the price of bitcoin rises, some critics have cautioned that the cryptocurrency consumes an unsustainable amount of electricity. New units of cryptocurrencies such as bitcoin are created through a digital method known as “mining,” which is a potentially lucrative undertaking that requires computers to run trillions of operations, consuming a lot of electricity. If more bitcoin is produced, mining new units become more difficult, necessitating more computing power and energy. Tesla was unlikely to have sold many if any, cars using Bitcoin, according to Meltem Demirors, chief strategy officer at digital asset manager CoinShares Group, and the backflip created positive publicity while simplifying payment processes. “Elon was getting a lot of questions and criticisms and this statement allows him to appease critics while still keeping Bitcoin on his balance sheet,” Demirors said. Tesla is not the only one. Major Wall Street firms such as Goldman Sachs and Morgan Stanley have also attempted to provide bitcoin exposure to their wealthy clients. However, some investors, such as Softbank founder Masayoshi Son, are still skeptical of the … Continued
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