Has Elon Musk become the de facto spokesperson for cryptocurrencies?

By Tsering Namgyal

Many had thought that Tesla founder Elon Musk would make comments that would push the price of Dogecoin further up during his appearance on Saturday Night Life (SNL) on 9 May.

Rather than promoting the cryptocurrency, he called Dogeoin a “hustle”, triggering a sell-off in the meme-coin.

It then jumped 20% after Musk tweeted that he was working with developers to improve transaction efficiency.

“This bombshell highlights the importance of separating Elon Musk the individual, and Elon Musk the custodian of the fortunes of Tesla and SpaceX – sometimes the interests of both personas diverge,” said Antoni Trenchev, co-founder and Managing Partner of Nexo, the leading regulated financial institution for digital assets with over $12 billion in assets under management.

Not too long after his SNL appearance,  Musk tweeted that his electric car company Tesla, which has bought $1 billion worth of Bitcoin, would no longer accept Bitcoin due to concerns over the cryptocurrency’s mining’s impact on environmental sustainability.

The world’s biggest digital currency fell more than 11 percent after the tweet and was trading at $50,480.

Meanwhile, the stock of Tesla dropped 4.42 percent to close at $589.89 on Nasdaq.

It is probably constructive that Musk raised the issue of Bitcoin mining and its impact on the environment because he touched upon Bitcoin’s what Trenchov called the “elephant in the room” which is Bitcoin’s ESG (Environmental, Sustainability and Governance) concerns.

Trenchov pointed out that Musk’s “Bitcoin’s stance is likely to be irreconcilable with his role as CEO of Tesla, which is a public company and answerable to shareholders and their ESG concerns.”

Analysts believe that not all Bitcoin mining is hazardous for the environment, even though Bitcoin represents approximately 0.1% of the global manmade emissions, according to Digiconomist Bitcoin Electricity consumption index.

A lot of the energy that Bitcoin consumes is otherwise lost due to lack of demand or cost-effective energy storage systems, said Ben Gagnon, Director of Mining Operations at Bitfarms, one of the largest public bitcoin mining operations in the world (listed in the TSX-V).

He said that the investors have a wide variety of choices when it comes to Bitcoin investment whether it’s buying the asset or investing in mining companies. Bitfarms, for example, operates on 69 MW of green energy which gives investors a clear-conscience investment option, he said.

Dogecoin consumes 0.12 kilowatt hours of electricity per transaction compared with 707 for bitcoin, according to data center provider TRG, cited by Reuters.

“Once the dust settles and the emotions subside, we’ll all remember that Tesla is still holding onto its pile of Bitcoin,” Gagnon said. “Yes, Elon and Tesla haven’t covered themselves in glory but BTC is still in the range of $46 – $65, where it’s been for 3 months.”

Bitcoin is getting comfortable and readying itself for the next move up towards his next key figure of $75,000, he said.

“The price dip is reactionary and the dip will be short-lived,” he added.

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