Bitcoin’s price jumped by 10 percent in 24 hours after Tesla CEO Elon Musk made another market-moving tweet on Sunday, announcing that his electric vehicle company could again start accepting bitcoin transactions if “there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend.”
Musk announced in February that Tesla had bought $1.5 billion worth of Bitcoin and would accept it as payment. He made a U-turn in May, saying that he would no longer allow his company’s electric vehicles to be bought using the cryptocurrency because of environmental concerns over the fossil-fuel-energy intensity of the mining process. Hundreds of billions of dollars were wiped off the entire cryptocurrency market within three hours.
Tesla is the second-largest publicly traded corporate holder of Bitcoin after MicroStrategy, and some market observers say that the companies’ CEOs, Musk and Michael Saylor, are pumping the cryptocurrency and manipulating its price to avoid going underwater and being forced to sell.
Cambridge University researchers created an online tool that estimates bitcoin electricity consumption. The Bitcoin Electricity Consumption Index shows that bitcoin consumes about 124 Terawatt-hours per year — about a half-percent of the world’s total energy consumption and as much as Pakistan’s.
The No. 1 crypto was trading at $40,243.20 as of this writing, up more than $4,500 from a 24-hour low of $35,721.15.
Buyers stepped in on Sunday after Musk tweeted that Tesla will allow bitcoin transactions again sometime in the future.
“$39M of #BTC #bitcoin short liquidations in 10 minutes,” @CryptoReini tweeted.
Short sellers borrow a security, betting that the stock they sell will drop in price. They sell it on the open market and expect to buy it back later for less money. If a trader has a short position, the liquidation margin is equal to what the trader would owe to purchase the security.
“Musk’s latest tweet is net positive for bitcoin because it not only gives a benchmark for Tesla to deem the cryptocurrency carbon neutral, but it will force mining groups to publicize information, therefore making the entire mining operations more transparent and environmental, social, and governance-friendly,” Nick Mancini, a research analyst at Trade the Chain, said.
“It will put the juice to the upside,” said Brian Tehako, executive director of Trading Desk Operations at the digital-assets market maker Hehmeyer, according to CoinDesk. “Our five-day simple moving average crossed through the 20-day average (a bullish development). The market could rise to $41,900.”
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?