DJ Elon Musk Rattles Bitcoin, but It May Just Be Green MarkeInteresting analysis. GLTA
DJ Elon Musk Rattles Bitcoin, but It May Just Be Green Marketing -- Barrons.com By Daren Fonda
Elon Musk wiped out more than $360 billion of value in Bitcoin with a tweet that Tesla would stop accepting the digital token for car purchases, due to the steep environmental toll of producing the cryptocurrency, a process known as mining.
But did it really just dawn on Musk that Bitcoin (BTC) mining burns a ton of dirty fossil fuels? Unlikely. Some analysts say it's more about green marketing -- burnishing Tesla's green credentials and potentially building support for solar or biofuels as an energy source for Bitcoin production, something that would benefit Tesla (ticker: TSLA) in the long run.
"There's no way someone who can send rockets into space and engineer greener battery technology didn't understand how Bitcoin mining works," says David Grider, head of digital assets research at Fundstrat Global Advisors.
Tesla isn't selling the Bitcoin it's accumulated, according to Musk, and will accept the cryptocurrency for payment "as soon as mining transitions to more sustainable energy," he said in a tweet. The company held $2.5 billion worth of Bitcoin at the end of March, according to a securities filing.
Musk also said he was open to accepting other cryptos that "use <1% of Bitcoin's energy/transaction."
Bitcoin's environmental toll is getting steeper as its price rises and the computing power needed to process and settle transactions increases. That isn't news. It's been well publicized and documented. And plenty of sources highlight the toll that mining takes as computers in the network consume electricity.
The total energy consumption of the Bitcoin network now accounts for 0.69% of global electricity consumption, according to the Cambridge Bitcoin Electricity Consumption Index. Bitcoin mining consumes more electricity than countries such as Sweden and Malaysia, according to Cambridge.