The tweet by Elon Musk about the possibility of Tesla accepting Bitcoin back has brought some excitement. As a matter of fact, there has been a significant surge in the price of Bitcoin as a result of this announcement. However, Tesla stated that it will only resume such transactions once they verify that the Bitcoin mining process runs on clean energy. As of Sunday 13th June at 11.09 p.m. ET, the price had surged to $38,903.23, which was a 10.2% increase. Tesla is one of the leading electric vehicle makers in the world and showing support for Bitcoin is a huge benefit.
In 2021, Bitcoin prices have fluctuated and in April, we witnessed the highest price ever of $64, 829.14. By Tesla making the announcement in the last few days, there have been significant gains in the Bitcoin price value. The most important condition that Tesla has put in place is to ensure that there is reasonable use of clean energy by the Bitcoin miners. Tesla has in the past been accepting Bitcoin as a mode of payment for car purchases. However, this was halted sometime in mid-May, with the main concern being the impact of crypto mining on the environment.
The truth of the matter is that there is a lot of energy needed to power the computers used for Bitcoin mining. According to research carried out by the Cambridge Bitcoin Electricity Consumption Index, Bitcoin mining takes more energy than what countries like Belgium and Finland used in totality.
What Impact Does Tesla Have on Bitcoin Prices
Since Bitcoin is still a foreign concept, most people rely on the comments and decisions by renowned brands to make a decision. For instance, the moment Musk announced their decision to stop the use of Bitcoin in purchasing cars, there was a sharp decline in the value of the coins. As you may have already realized, Bitcoin prices end up affecting all the other coins. Tesla pointed out the possible environmental impact of Bitcoin mining and this has raised quite some concerns. Traders and investors have been observing the market trends as Bitcoin seems to be trying to bounce back to a higher price.
This revelation has not been taken lightly as most people are keen on conserving the environment. For instance, China has become vigilant and has recommended punishments for people who are involved in virtual currency mining. The vice president of China has said the crackdown on Bitcoin mining is meant to protect the social field. Traders are now relying on platforms like https://bitcoindigital.io/ to keep up with the cryptocurrency world. Even in Iran, there was a ban on crypto mining right after Tesla suspended the acceptance of Bitcoin as a mode of payment. The suspension in Iran is set to end in September.
What Is the Way Forward for Bitcoin Mining?
Elon Musk, Tesla CEO has confirmed that they will resume Bitcoin transactions once the company has confirmed that clean energy is being used for mining. Reports show that Tesla had bought Bitcoin worth about $1.5 billion, which is quite a significant amount. With the announcement that it will embark on accepting Bitcoin, there is certainly going to be a positive impact in the crypto markets. The major concern was the increase in the use of fossil fuels in the mining of the coins.
There were allegations of market manipulation, which the Tesla CEO has refuted and confirmed that they sold about 10% of the Bitcoin they had. This was actually a good move as it went to prove that liquidation of Bitcoin can happen easily without any manipulation of moving the market.
All the comments that Musk has been making on social media about cryptocurrencies have a serious impact. Let us wait and see what happens in the coming days as Bitcoin prices seem to be on the rise.