Bitcoin is heading for a weekly decline of more than 10%, after Tesla CEO Elon Musk stepped up his attack on the energy requirements of the cryptocurrency mining process.
In his recent tweets, Musk said that he "believes strongly in cryptocurrencies, but" it cannot lead to a massive increase in the use of fossil fuels, especially coal. "
Earlier, Musk described recent trends in Bitcoin energy consumption as "crazy." On Wednesday, he said Tesla would suspend cryptocurrency car purchases.
The shift by a cryptocurrency staunch believer caught investors by surprise and drove down prices on all cryptocurrency assets, including Bitcoin dropping to around $ 46,000.
The most popular cryptocurrency trimmed some losses, and its price hovered around $ 50,000 this Friday morning in the Asian markets, which helped the Bloomberg index of cryptocurrencies to rise by 6%.
Musk officially posted a statement on Twitter, explaining that Bitcoin's electricity consumption has increased dramatically this year, expanding his criticism of cryptocurrency mining using fossil fuels.
"Bitcoin is also a manifestation of the value of the internet, so it stands to reason that social media and celebrities can have an impact on increasing demand," said Stephen Kelso, Head of Markets at ITI, Bloomberg reported.
Extreme energy consumption
Bitcoin mining is consuming 66 times more electricity than it was in late 2015, according to a recent Citigroup Inc. report.
On Wednesday, Musk indicated that Tesla might accept other cryptocurrencies if they were less energy-intensive, and said the company would not sell any of its Bitcoins.
In more recent posts, he said he is working with Dogecoin coin developers to improve "system transaction efficiency", describing the effort as "promising."
However, Musk's tweets are raising questions about Bitcoin's appeal as an investment, just as voices are starting to rise about climate change and environmental issues.
Popular promotion
Tesla's disclosure in February of a $ 1.5 billion investment in Bitcoin, and the plan to accept it as a form of payment, were a major catalyst in the bullish cryptocurrency market. In analysts' eyes, it helped legitimize the largest cryptocurrency by market value and attract new investors.
His interest in Dogecoin has boosted its popularity as well, and he tweeted on Tuesday, “Would you like Tesla to accept a Doogee?” (In reference to the Dodge Queen. "
But his Twitter posts could pose a dilemma for many investors, as they tend to move the prices of stocks and cryptocurrencies.
Anthony Trenchchev, managing partner and co-founder of Nexo in London, a cryptocurrency lender, said: “Society must now work harder to advance the issue of clean energy mining ... Bitcoin’s history has taught us that the path to global acceptance is not without obstacles. This path is likely to be the largest. "
