Bitcoin and Dogecoin prices are on the rise again after Elon Musk's latest tweets where he explained that his car making company Tesla will resume allowing Bitcoin transactions if there's confirmation of reasonable clean energy usage by miners. Musk's clarification came a month after he had announced that Tesla will not accept payments in Bitcoins as promised earlier. The Tesla chief had cited environmental concerns due to Bitcoin mining as a reason behind the decision.
The statement led to a negative sentiment in the crypto market. Most cryptocurrencies including Bitcoin were on a downward trajectory in May before the market crash of May 19. Some cryptocurrencies have recovered since then but, Musk's latest vote of confidence is probably what was required.
A day after his new tweet, the value of Bitcoin rose more than 10 per cent. Bitcoin price was more than Rs 30 lakh (at the time of writing) while Dogecoin was trading around Rs 24 (at the time of writing).
While the price hike comes as good news for the investors, the recent history of crypto market suggests that they shouldn't get too excited. The market has been very volatile in the last few months and a similar trend is expected in the coming future. The reason behind it is that the crypto market is still quite young and ends up reacting to government policies, tweets from influencers and other external factors.
The Musk-Bitcoin relationship is an example of the same. Elon Musk had brought Bitcoin to prominence by regularly tweeting about it. Later, Tesla had also revealed that it had bought $1.5 billion worth of Bitcoin. The electric vehicle company had also announced that it will accept the cryptocurrency for payments.
However, in May, Musk tweeted a Tesla statement that said the company was suspending Bitcoin payments because of the rapidly increasing use of fossil fuels for mining and transactions. Since then, Musk has maintained that neither he nor Tesla plan to sell their Bitcoin holdings. He has also maintained that cryptocurrencies have the potential to become the future currency of the world.
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