Following Bitcoin’s drastic plunge from $44,000 to $30,202 in the last 24-hours, Beijing have implemented bans within banks and payment companies on offering crypto-related transactions.
Wasn’t Bitcoin at an all-time high just a few weeks ago?
Of course, this rollercoaster starts and ends with Elon Musk. Musk’s relationship with cryptocurrencies changes so rapidly that it’s hard to keep up. He has the dangerous ability (and let’s be frank, money) to directly influence the cryptocurrency market, which doesn’t seem to be going down too well. Let’s unpack what’s going on.
It was only earlier this month that Tesla – Elon Musk’s electric vehicle company – announced it had purchased $1.0 billion of Bitcoin, planning to accept cryptocurrency in the future as payment from its customers.
This announcement caused the cryptocurrency to surge, from $US39,000 to $US46,000 and then to its all-time high of almost $US65,000, and a paper profit of well over $US1 billion for Tesla.
Fast forward a few short weeks, and like any rollercoaster relationship, the situation had changed entirely. The news broke that Tesla had sold 10% of its Bitcoin holdings, apparently to demonstrate the digital currency’s liquidity.
Then, Musk announced on Twitter that Tesla has suspended purchases using Bitcoin amid concerns around Bitcoin consumes more energy than an entire European country, directly contradicting Tesla’s brand values.
This then prompted a huge sell-off in the crypto markets, with Bitcoin plunging from around $US55,000 to the mid-$US45,000s, and it’s kind of been downhill from there.
Crypto fans have understandably turned on Musk, fighting back by reportedly launching the StopElon coin, a new currency aimed at curbing the billionaire’s influence. According to the new currency’s official website, StopElon has been designed as a “community created to destroy the biggest market manipulator of them all”, citing Musk as “irresponsible” in his market influence. Honestly, we can’t argue.
The concerns around Bitcoin’s carbon footprint are hardly new. Its network is secured by “miners” using arrays of supercomputers to compete in very complex number-guessing games, which uses large amounts of electricity.
As being thoroughly documented, this is the equivalent usage of a medium-sized country, and the power consumption can be followed in real-time here. Worse still, much of this crypto-mining relies on coal-fired power in China.
Basically, it’s pretty difficult to believe that Musk and Telsa, with all their influence, power and resources, were not aware of these issues before their $1.0 billion investment in Bitcoin.
All of this explains why the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China issued a warning on social media, sharing that customers would have no protections if they dealt with losses. They also added that recent crypto price swings are disrupting the “normal economic and financial order.”
“The Chinese position on cryptocurrencies is clear from the beginning: trading and usage of cryptocurrencies are simply forbidden,” wrote Ipek Ozkardeskaya, senior analyst at Swissquote, as reported by CNN. “Therefore, the news is nothing ‘new,’ but given that crypto traders are too sensitive to negative news nowadays, it adds to the downside pressure on cryptocurrencies.”
This move by Chinese officials doesn’t look good for the world of cryptocurrency. Businesses and individuals have invested millions into this digital currency, with the hope that one day it will be worth more than physical cash, only to be prevented from transacting it, rendering its value to nothing.
Crypto fans blame Musk, and want to take their power back.
“He’s toying with people’s portfolio like candy,” the official StopElon website reads, “like the narcissistic billionaire he is and always will be. We say ENOUGH. Hence, we created $STOPELON. Where we get rich, without anyone controlling our fate except ourselves.
“Anyone with even a shred of critical thinking sees through his lies. He has been trying to pump crypto for ages, tweeting about it to no end, and even going to Saturday Night Live as a final resort to get Dogecoin up!”
The solution? Members of the StopElon website reckon that taking over Tesla is the way to go. Their ambitious goal is to create enough value to buy Tesla stock, and then purchase full control of the company.
Or you could just ban cryptocurrency transactions like China, which seems smart and drama-free, but would mean huge financial loss for many companies and people.
It sounds like a messy war for the money-hungry to us.