Bitcoin closes in on $40,000 level after Elon Musk’s tweet

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Bitcoin prices are up by 11% and currently trading near $40,000 levels after Tesla chief executive officer Elon Musk tweeted on Sunday that he will resume Bitcoin transactions provided miners who verify transactions use more renewable energy. Musk also said that Tesla sold about 10% of its holdings to confirm that Bitcoin could be liquidated easily without moving the market.

He replied to a Cointelegraph’s post where Sygnia CEO Magda Wierzycka lambasted him saying “What we have seen with Bitcoin is price manipulation by one very powerful and influential individual.”

This is inaccurate. Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market.

When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions.

— Elon Musk (@elonmusk) June 13, 2021

Earlier in May, Elon Musk tweeted that the electric car maker would stop accepting Bitcoin as payment for its vehicles citing environmental concerns associated with Bitcoin mining.

Bitcoin is mined with the help of a complex algorithm that runs on supercomputers. The Blockchain and Crypto Council, a subcommittee under the Internet Mobile Association of India, recently in one of its reports stated that the mining industry has been migrating towards clean energy. The report stated that crypto mining uses 40% renewable energy compared while Internet data centres use 20% renewable energy.

India had also reportedly banned the import of a specific component of cryptocurrency mining equipment called ‘application-specification integrated circuits’ or ASIC. This is probably why cryptocurrency trading is far more popular in India than cryptocurrency mining.

Bitcoin prices crashed to almost $30,000 level in May Elon Musk’s environmental concerns associated with bitcoin mining. Another reason for the crash was when China warned investors against speculative trading in them and said cryptocurrencies would not be allowed. Even after the sharp decline on May 19, most of the cryptocurrencies have recovered and their YTD returns still look healthy. Bitcoin, Ethereum and Cardano have given the return of 33%, 241% and 774% since January.

Earlier in February Elon Musk announced that he invested $1.5 billion in Bitcoin after which prices rose sharply of the virtual currency.