- The digital asset market trades quietly to the upside on Tuesday
- Concerns over Bitcoin’s carbon footprint likely to keep a lid on the asset’s price
Cryptos Stabilize After Monday’s Selloff
The cryptocurrency market on Tuesday appears to have stabilized following Monday’s sharp decline. Yesterday’s volatile trading was largely prompted by Tesla Chief Executive Elon Musk. The latter inspired speculations that the car company had sold, or would sell, its Bitcoin holdings, which amount to 43,200 coins of the cryptocurrency.
Elon Musk later clarified his electric car company had not sold any Bitcoin so far in the second quarter. As a result, the cryptocurrency market erased some of the losses, demonstrating Mr. Musk’s power to shift the crypto market momentum.
After the billionaire engineer confirmed Tesla had suspended Bitcoin as payments for its vehicles due to environmental concerns, the price of Bitcoin has slipped to $45,000. The market value of the world’s largest digital asset has fallen by about 30%, from $1.2tn to $840bn.
Overnight, Bitcoin traded as low as $42,100, before rebounding slightly to current market price of $45,000. The price of Bitcoin remains under heavy pressure as it is now 30% lower from its record high near $65,000 a little over a month ago.
Other coins are also trying to make a comeback. Ether, the second most valuable coin, has climbed about 10% from its Monday low and is currently trading near the $3,500 threshold. The token used to power the Ethereum network sprinted to a record high of $4,400 one week ago.
Concerns Over Bitcoin’s Carbon Footprint
This year, despite the tremendous mainstream support by corporations and institutions, Bitcoin is up around 30%, while Ether is higher by 370% for the same period. More recently, Bitcoin was rattled by rising concerns over its carbon footprint. Tesla and Square, a payment company, sounded the alarm that the biggest crypto token uses significant amounts of energy in order for its mining mechanism to work. Both companies have called for cleaner energy sources for Bitcoin mining, effectively throwing a wrench into Bitcoin’s rally to the upside.
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