Elon Musk Flip-Flops on Bitcoin, Yet Again

Musk’s latest tweet struck investors bullish, rocketing the price to a $41,067.74 high in the past 24 hours, the highest the coin has been valued in around two weeks.

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key takeaways

  • After the late Sunday tweet from Elon Musk, bitcoin jumped to $41,067.74
  • Luxor’s CEO says “the Bitcoin network [will] continue to foster renewable energy as renewables become cheaper and cheaper

Elon strikes again.

The price of bitcoin jumped 9.58% after the CEO announced that Tesla would start accepting bitcoin as payment again if miners cut energy usage to 50% or less, he tweeted on Sunday afternoon.

The tweet struck investors bullish, rocketing the price to a $41,067.74 high in the past 24 hours, the highest the coin has been valued in around two weeks.

“When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions,” he wrote. 

According to the Cambridge Bitcoin Electricity Consumption Index, the annualized energy consumption for bitcoin is ~11.33 GigaWatts or ~97.19 TWh.

It was unclear based on the tweet how Tesla will confirm the miner’s energy usage.

It’s still big news for bitcoin investors after the electric-car company had discontinued accepting payments in the cryptocurrency back in May citing environmental concerns.

Co-founder of Luxor, a bitcoin mining firm who just closed $5 million in Series A funding led by NYDIG, weighed in on Musk’s statement.

“I think Elon is trying to have his bitcoin cake and eat it, too. By issuing such an edict, he’s able to comfortably maintain Tesla’s bitcoin position without having to withstand the negative PR associated with bitcoin’s energy consumption,” Nick Hansen wrote in a statement to Blockworks. 

The Big Picture

Musk’s comment comes at a pivotal moment when bitcoin mining and environment concerns have been dominating recent headlines. 

Just last week El Salvador crowned bitcoin as legal tender then expressed interest in volcano-powered bitcoin mining. Meanwhile, Iranian President Hassan Rouhani banned any cryptocurrency mining until September, Blockworks reported.

Similar to Iran, China’s Qinghai province also issued a ban on cryptocurrency mining operations, citing energy usage as well.

“China’s move is not surprising given its history of crypto repudiation,” Haohan Xu, CEO of Apifiny, said in a recent interview with Blockworks. “The news also reflects the recent expansion of mining to other countries like the United States, Russia, Kazakhstan and Malaysia — and the increased throughput of existing miners outside of China. Some trading platforms are even starting to mine Bitcoin to help increase liquidity for their traders and exchange partners.” 

Even New York legislatures are debating whether or not to limit the digital asset’s mining operations.

Rob Chang, CEO and director of Grpyhon Digital Mining, chimed in, adding that it isn’t the only industry in the US that utilizes energy. 

“If you look at the footprint that bitcoin uses, it is relatively small compared to other things, it just so happens that bitcoin has been in the spotlight,” he said in a recent interview with Blockworks.

However, despite the mainstream backlash Hansen remains hopeful about the future for bitcoin mining. 

“We will see the Bitcoin network continue to foster renewable energy as renewables become cheaper and cheaper. The Bitcoin network is already predominately renewables; the Sichuan and Yunan provinces are largely hydroelectric and make up a large portion of the overall network hashrate,” Hansen said.

At the time of publication, bitcoin was trading at $39,859.56, according to CoinGecko.

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