Elon Musk’s Tesla bitcoin ban could permanently damage the cryptocurrency’s value | City & Business | Finance
Elon Musk and his Tesla firm controversially stopped accepting bitcoin for funds of the electrical vehicles, citing environmental considerations as the motive. The choice marks a drastic U-turn because it was solely in February that Tesla started accepting the cryptocurrency as fee. Bitcoin had surged in value over the final 12 months, going from round $10,000 (£7,000) in May final 12 months to $58,000 only a week in the past.
However, Mr Musk’s sudden announcement has precipitated an enormous crash in the value of Bitcoin, dropping to round $45,000 as of at this time.
While it’s nonetheless a profitable quantity, many bitcoin and Elon Musk followers have been left infuriated by the Tesla choice who imagine they’ve been shortchanged after seemingly following the South African-born billionaire’s lead in shopping for the cryptocurrency.
Experts are presently not sure how bitcoin will; bounce again or if it would ever recuperate the sturdy momentum it had constructed up.
Sam Onigbanjo, Founding Partner, Capital Markets Academy, advised Express.co.uk: “Elon Musk’s comment on Bitcoin is a very interesting one, seeing he has banned the purchasing of Tesla goods with bitcoin but at the same time has kept all Telsa’s bitcoin.
“I see his ‘ban’ as a market transfer that could be used to pressure down the value of Bitcoin for a time period.
“His ban also gives environmentalists another platform to stand on as damage to the environment is most felt with bitcoin as opposed to any of the other cryptocurrencies
“Some issues are clear, firstly Elon Musk’s ban will certainly decelerate the bullish momentum with bitcoin and will even lead to an enormous dip in its value.
“Secondly, Elon Musk and Tesla’s ban will shine a light on Environmental issues around mining bitcoins.
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“In abstract: Either means we take a look at it, for the close to foreseeable future, Elon Musk has single-handedly created the best doubt and uncertainty round the bitcoin in 2021.”
Other experts believe that Mr Musk’s bitcoin ban could also lead to reputational damage for himself.
Aaron Shields, Executive Director of Experience Strategy EMEA at Landor & Fitch said: “More damage may still come to Musk’s own personal brand, built up through a cult-like following amongst liberals and cryptocurrency investors who will likely be feeling betrayed by the announcement.
“Bitcoin’s value was already plummeting following Musk’s SNL look and Tesla’s withdrawal has precipitated it to drop additional.
“Individuals who invested in bitcoin because of his endorsements will expect answers and, while Musk has weathered past storms because of his grand visions, he’ll have to use all of his charm over the coming days and weeks to avoid lasting impact on both his and the Tesla brand.”
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However, another expert believes Mr Musk is just one more clog in the cryptocurrency machine, and bitcoin will be here to stay regardless of the SpaceX chief’s incessant tweeting.
Sobanan Narenthiran of 3T Collective CIC, told Express.co.uk: “Bitcoin will not be reliant on Elon Musk; cryptocurrency was round lengthy earlier than whales like Musk obtained concerned in the area and it’s pertinent to keep in mind that they’ll be round lengthy after.
“No one considers the amount of greenhouse gases produced by the banking industry or traditional financial services because they do not challenge the status quo.
“It’s a short lived a part of the market cycle besides if this was some other asset class; Musk can be thought of a market manipulator.
“The idea of bitcoin is to create a decentralised economy, regardless of Musk; there have been crypto enthusiasts, innovators and entrepreneurs utilising this space to help create a future that benefits a larger majority of society globally.
“Bitcoin is right here to remain; that is exhibited by the huge uptick of the cryptocurrency in the public consciousness.”