Tesla stops accepting bitcoin – advantage Elon Musk & Dogecoin?

Karthik Subramanian

Elon Musk, the owner of Tesla, the world’s largest producer of electric cars, today declared that Tesla would no longer accept bitcoins as a payment method for its cars.

blockchain

Elon tweeted that the company was worried about the energy being used up for bitcoin mining and how fossil fuels are destroying the Earth and hence the company had decided to not use Bitcoin as a payment method henceforth. It was only a couple of months back that he had said that Tesla had started accepting bitcoins as a payment method.

In what can be seen as proof of how fickle the cryptocurrency market can be and how risky it can be for traders, the value of bitcoin plunged by closed to 20% from $57,000 to close to $46,000 before recovering back to $50,000 again.

Though on the face of it, the declaration by Elon Musk seems to show concern for the environment, skeptics still believe that it is more of a price manipulation tactic rather than a real concern. The fact that Bitcoin uses a lot of energy for its mining and the fact that most of the available bitcoins have already been mined is well known in cryptocurrency circles.

So to declare that as something that they have newly identified and realised has sowed doubts in the minds of the sceptics. The unfortunate effect of all this is that the retail traders have been left in the lurch and a lot of liquidations have happened on leveraged positions in many of the crypto exchanges overnight.

Elon also tweeted that Tesla would be looking to accept other cryptocurrencies, that consume very little energy, as means of payment in the future which could be interpreted as a nudge towards dogecoin, his favorite crypto at the moment.

The prices of bitcoin have since crashed and this shows that it continues to be a market that can be manipulated by big players and we are far from having a level playing field in the crypto market as yet. While the entry of very large and credible investors like Elon Musk is indeed a boost to the market as a whole, such price manipulation through tweets serves to reduce the credibility of the market as a whole and tends to put off serious investors who are looking for stable instruments to trade with low risk.

This has also led to renewed calls for regulation to bring such activities under control and it also calls for diversification of trades and investments into other cryptocurrencies so that the manipulation in one instrument does not affect the entire market as a whole.

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