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Musk continues love-hate relationship with bitcoin

(ATF) Elon Musk once again sent bitcoin on a rollercoaster ride on Monday Asian time after suggesting on Sunday that Tesla might be considering or might have already sold off its bitcoin holdings.

Musk’s tweet was in response to an unverified Twitter account called @CryptoWhale, which said: “Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their #Bitcoin holdings. With the amount of hate @elonmusk is getting, I wouldn’t blame him.”

Musk replied with “indeed” without specifying whether Tesla had sold off its bitcoin holdings or that he simply agreed with the sentiment that he faced criticism.

Tesla announced in an SEC filing in February that it has bought $1.5 billion worth of bitcoin. The company also said it would start accepting bitcoin as a payment method for its cars and accessories.

On May 12, Musk said Tesla would no longer accept bitcoin for car purchases, citing long-brewing environmental concerns for a swift reversal in the company’s position on the cryptocurrency. That triggered a 17% slide in the value of the cryptocurrency.

Then on Monday May 17, bitcoin fell more than 9% to as low at $42,185 – it’s lowest since February 8, before rallying over 5% to around $44,220.

However, Musk, in a later tweet, said: “Tesla has not sold any bitcoin”.

That seeming clarification came after his weekend tweets that hinted Tesla is considering or may have already sold some of its massive holdings.

Musk has boosted crypto markets with his enthusiasm for the asset class, but lately he has roiled trade by appearing to cool on bitcoin in favour of its one-time parody, dogecoin. The gyrations are beginning to spook even steeled traders.

Ether, linked to the ethereum blockhain, fell even more to as low as $3,123.94, and then rallied to $3,400. Dogecoin fell nearly 7% to $0.48, and all three are well under recent records.

“Elon Musk has been the catalyst to this, but ultimately it just comes down to the nuts and bolts of what crypto really is: it’s a store of value, but it’s also a momentum vehicle, and right now the momentum is to the downside,” Chris Weston of brokerage Pepperstone in Melbourne told Reuters.

ENERGY SOLUTION

As concerns rise about the energy-intensive process needed to obtain it, cryptocurrency entrepreneurs believe they have found a solution in flared natural gas.

Profitably creating, or mining, bitcoin and other cryptocurrencies requires masses of computers dedicated to solving deliberately complicated equations – an endeavour that globally consumes more electricity than entire nations.

But the jets of flaming gas placed next to oil wells could be the perfect power sources. “I think the market is enormous,” said Sergii Gerasymovych, chief executive of EZ Blockchain, which has six different data centres powered by natural gas in the US and Canada. 

Whether or not Tesla has sold its holdings, Musk raised the temperature in the cryptocurrency debate.

The user @Cryptowhale later tweeted: “Immediately after Elon Musk replied to me, I got thousands of death threats, failed dox attempts, and false rumours spread about me by hardcore Bitcoin Maximalists. I respect everyone, regardless of whether you disagree with me! This is just sad behaviour though.”

With reporting by Agence France-Presse and Reuters

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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