It’s a bird; It’s a plane; it’s an asteroid coming down to kill us all. No wait, It’s Bitcoin; Elon must have tweeted again.
The past week saw the crypto believers weep as they hedl onto their depreciating stash hoping for a quick rebound and not to die a death through hundred cuts. For a currency with the USP of being decentralized and by virtue immune to a single entity’s decisions, Bitcoin seems to be attached to Elon inadvertently like a siamese twin.
The crypto tumble began when the Tesla CEO tweeted, informing the people that the company has decided to renege on their decision to accept Bitcoins for Tesla’s purchase due to environmental concerns and the immense carbon footprint Bitcoin incurs. It is a fact that mining Bitcoin devours huge amounts of electricity generated by fossil fuels leaving a horrible carbon footprint.
But the question is, how was the company who themselves operate on electricity generated by fossil fuels not aware of the fact before they decided on this diversification? How was this not taken into consideration before the company announced their decision in February? Are we supposed to believe that Elon and the company were, in fact, unaware of this reality?
This started the downfall of Bitcoin along with other prominent currencies like Ethereum, BNB, Cardano, etc. The currencies fell by an average of 20%. Bitcoin was down 30% to somewhere around $30,000. CoinGecko reported that a total of $600 billion was obliterated from the market. This, however, cannot be pinned to the Technoking alone.
The crash also had to do with China repeating its 2017 ban on cryptocurrencies by announcing a fresh imposition on private companies from participating in the crypto world.
Bitcoin is now 40% lower than its all-time high at $65,000 in April.
But Elon Musk also took to Twitter to calm down the investors by indicating that Tesla still holds its stockpile of the currency, which they do not intend to sell anytime soon. Tesla owns 38,300 bitcoins, roughly amounting to $1.4 billion.
The crash does highlight the volatility of the currency that pegs itself to be stable and inflation resistant. Bitcoin’s rise has lately been propelled by the FOMO of the retail investor along with its acceptance by institutional investors. In theory, it has all the potential to be the currency of the future, but just like the share market, knee jerk reactions and emotionally motivated transactions are running it into the ground.
Crypto enthusiasts strongly opine that this is just another bump in the road to the glorious future. What do you think? Are you willing to weather out the storm?