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Bitcoin price back below $50,000. What’s next for the cryptocurrency?

Cryptocurrency NewsMay 13, 2021 11:44
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© Reuters

By Samuel Indyk

Investing.com – Bitcoin slipped back below $50,000 in the latter half of the morning as Elon Musk’s U-turn continues to pressure the cryptocurrency space.

Late on Wednesday night, the Tesla (NASDAQ:TSLA) CEO announced on Twitter that the electric vehicle company would no longer be accepting Bitcoin as payment for its vehicles, citing environmental concerns.

“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,” Musk said on Twitter.

Musk also posted a chart of the Cambridge Bitcoin Electricity Consumption Index – created by the University of Cambridge - showing the increasing level of energy usage in recent months as the prices of Bitcoin and other major cryptocurrencies have jumped to record highs.

So, what’s next for Bitcoin?

This was a question posed by AJ Bell financial analyst Laith Khalaf.

“Environmental matters are an incredibly sensitive subject right now, and Tesla’s move might serve as a wake-up call to businesses and consumers using Bitcoin, who hadn’t hitherto considered its carbon footprint,” Khalaf said.

“Tesla’s decision certainly puts pressure on other big companies who accept Bitcoin to review their practices, because boardrooms will now be wary about getting it in the ear from ESG investors on the shareholder register.

“This highlights that the long-term adoption of cryptocurrencies by businesses, consumers and investors is still highly uncertain, as Tesla itself has pointed out.”

Companies in the cryptocurrency space have fallen in US pre-market trade with MicroStrategy (NASDAQ:MSTR) down around 10% and cryptocurrency exchange Coinbase (NASDAQ:COIN) down 5.3% at 11:40BST.

However, despite the latest move, Musk and Tesla have not completely closed the door on Bitcoin and other cryptocurrencies. In fact, Musk noted that Tesla would not be selling its current holdings, which amounts to approximately $1.3bln, and intends to use it for transactions once mining transitions to more sustainable energy.

Musk also stated that Tesla is looking at other cryptocurrencies that use less than 1% of Bitcoin’s energy/transaction.

Just on Tuesday, Musk posed a question on Twitter to his followers asking if Tesla should begin accepting Dogecoin. Whether the billionaire was serious or not remains to be seen.

Energy efficient mining

One interesting point to note amongst the noise is that the AIM-listed cryptocurrency miner Argo Blockchain (LON:ARB) today announced it has bought two data centres in Canada that are powered mostly on hydro power. The company said this was a key part its “green mining vision”.

At 11:40BST, Bitcoin was trading just above $49,000, down 13% over the last 24 hours. The second largest cryptocurrency by market cap, Ethereum, was around $3,700, down 12.2%. Elon Musk’s former favourite, Dogecoin, was trading around $0.40, down 18% in the last 24 hours.

Bitcoin price back below $50,000. What’s next for the cryptocurrency?
 

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Comments (11)
Prom Vor sopheak
Prom Vor sopheak May 13, 2021 16:11
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Mahi Commerce Zone
Mahi Commerce Zone May 13, 2021 14:50
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43500 touch btc
Mareks Boriss
Mareks Boriss May 13, 2021 13:20
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he sold off his bitcoins, crash on the way...
Taj Khan
Taj Khan May 13, 2021 13:20
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did you not read the article, it states tesla is holding on to its bitcoin investment. go to specsavers bro !
Stefanos Gogoussis
Stefanos Gogoussis May 13, 2021 13:20
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not only are you uninformed but also eager to tell off others. Tesla sold a part of its btc holdings in Q1. Do your own research before being a smartass and insulting others
Mareks Boriss
Mareks Boriss May 13, 2021 13:20
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Stefanos Gogoussis you will see it soon.
Ivan Djuric
Ivan Djuric May 13, 2021 13:08
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Then this is a big problem for cryptocurrencies if they are not accepted as a means of payment.
Stella Nabuule
Stella Nabuule May 13, 2021 12:46
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why is the whole world listening to one person when hes just taking a *** at this point.
Stella Nabuule
Stella Nabuule May 13, 2021 12:45
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Elon is causing crypto crushes in just 1 sentence. every week its a new thing I'm getting sick of this now.
Prom Vor sopheak
Prom Vor sopheak May 13, 2021 12:45
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Theo Marshall
Theo Marshall May 13, 2021 12:31
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Typical Elon making outlandish claims he would accept Bitcoin for Teslas. He didn't seem to realise that the SEC would be on him in no time if he did that.
klaudia fabianska
klaudia fabianska May 13, 2021 12:31
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are u 12 ? he didnt realise ? buhaha such a joke richest man in the world dont realised !
Abdul Azeez Dawood
Abdul Azeez Dawood May 13, 2021 12:24
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Its purely monopoly just listening to one man comment currency behaviour change to thisi extent seems like Buffets saying its worthless
Garry Musgrave
Garry Musgrave May 13, 2021 12:17
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Hopefully sees a swing to crypto with real value such as GlobalGive with its charity angle
Ernst Berg
Ernst Berg May 13, 2021 12:01
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Ridiculous the sensitivity to one men’s remark
Eddy Winko
Eddy Winko May 13, 2021 11:55
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no mention of XRP, the greenest of all crypto
 
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