Cryptocurrencies Drop – Tesla Stops Car sells with Bitcoin

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Created by TradeOr

3rd Party Analysis 13 May 2021

Key Takeaways:

  • Crypto assets take a hit as Bitcoin dives following Elon Musk’s tweet
  • Digital currencies attempt to stage a comeback but buying momentum remains weak

Bitcoin Dives Substantially After Elon Musk Tweet

Bitcoin slid over 20% in the past two days as selling intensified after Tesla CEO Elon Musk announced on Twitter the electric car maker will no longer accept Bitcoin as payment for its electric vehicles. On Wednesday, bitcoin was able to climb near $58,000, while after the announcement, the price nosedived to a low of $45,900, a decline of 20.70%.

The session low, last seen on Mar 1, was scooped up and bitcoin now hovers around the $50,000 milestone, or around 9% lower on the day. Buying momentum remains weak as the price slowly crippled to the downside in the afternoon hours on Thursday.

Tesla recently took the leap to allow customers to pay for cars using Bitcoin. The move, which lifted hopes that the cryptocurrency mainstream adoption is accelerating, lasted for less than two months. The main reason, as stated in Mr. Musk’s tweet, is concern over the detrimental effect of Bitcoin mining on the environment.

Environmental Concerns Spurned This From Musk

“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,” Mr. Musk commented in his Twitter post. He goes further to say his electric car company will not be using or selling any Bitcoin until the digital asset finds cleaner energy sources.

“Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy,” he said. “We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.”

Other cryptocurrencies also took a hit. Ether slipped to a low of $3,500, a decline of roughly 19% from its peak of $4,400. The Ethereum coin managed to erase half of the intraday loss as buyers pushed the price to a current level of $3,800. Ether still remains negative by about 8% for the day.

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