Tesla halts Bitcoin payments. Is Musk "getting tired of the old and loving the new" or "playing hard to get"?

On Thursday morning Beijing time, Elon Musk, CEO of Tesla, who has always been hailed as the flag bearer of Bitcoin and cryptocurrency, said on Twitter that Tesla has stopped using Bitcoin payments due to concerns about the rapid growth in consumption of fossil fuels such as coal caused by Bitcoin mining and trading.

This triggered a strong reaction in the crypto market. According to Bitpush terminal data, the price of Bitcoin once dropped from around $55,000 to $48,000. The collapse of Bitcoin also caused panic in the entire crypto market.

People in the crypto community have also spoken out about Musk's remarks and Tesla's decision. Morgan Creek founder Anthony Pompliano tweeted sarcastically, "I hope Tesla will stop accepting US dollars as payment, as the US dollar also has a negative impact on the environment."

Chia founder Bram Cohen commented on Twitter, “If you are concerned about the impact on the environment, you should sell all your Bitcoins, which will increase supply and lower prices, reducing mining revenue and energy consumption.”

However, not everyone is critical of Musk. Galaxy Digital CEO Mike Novogratz said on Twitter, "I believe him. He cares about the environment and he is using his influence to push Bitcoin mining towards a greener future. Many companies in this field are already working on this."

Cameron Winklevoss, co-founder of Gemini, said, “When Musk realizes that Bitcoin mining is actually driving the renewable energy industry forward, he will reconsider this issue, and then the price of Bitcoin will soar.”

Grayscale CEO Michael Sonnenshein believes that renewable energy has the potential to play an important role in the cryptocurrency and mining sectors.

According to a report by BitPush last month, the famous investment bank Goldman Sachs said in a research report that Bitcoin's energy problem undermines its concept of digital gold. It mentioned that it is "too early" for Bitcoin to compete with gold as a safe asset because its mining requires extremely high energy consumption.

Cambridge University previously estimated that the Bitcoin network consumes about 130 terawatt hours (TWh) of electricity per year. If Bitcoin is compared to a country, its energy consumption is enough to rank in the top 30 in the world. Previous research conducted by crypto media Decrypt showed that the carbon footprint generated by Bitcoin is roughly equivalent to 61 billion pounds of coal burned per year, the average annual electricity consumption of 9 million households, or 138 billion miles driven by a passenger car.

Goldman Sachs believes that these widespread environmental and energy consumption issues are causing potential investors to steer clear of Bitcoin.

Since Bitcoin’s energy consumption problem is not a new problem, why would Musk choose to abandon Bitcoin, which he has always supported, at this time?

Makoto Sakuma, deputy chief researcher at Nissho Research Institute, said that the problem of high energy consumption of Bitcoin miners has long been known, so it is nothing new. But combined with Musk's recent remarks on Dogecoin, his latest remarks seem to indicate that his enthusiasm for cryptocurrencies may be waning.

This speculation is not impossible, because for Bitcoin, the problem of using clean energy is not unsolvable. Renewable energy is playing an increasingly important role, and resources such as oil field waste gas that used to be wasted have now found the most appropriate way to use them.

However, "loving the new and getting tired of the old" may better explain Musk's choice. He said Tesla will not sell the cryptocurrencies it currently holds and is considering using cryptocurrencies with lower energy consumption.

In fact, more cryptocurrencies are using low-energy consensus solutions such as proof of stake. Ethereum, the second largest blockchain, is also transitioning to the proof of stake mechanism.

Justin d'Anethan, sales manager at Hong Kong digital asset company Diginex, said, "Musk's reason for suspending Bitcoin payments is the consumption of fossil fuels due to Bitcoin mining, but most cryptocurrencies have found more effective ways to solve this problem."

John Deaton, the attorney for Ripple, the company behind XRP, said that no matter what Musk thinks, he has brought the best advertising to XRP. Ripple CEO Brad Garlinghouse previously said that XRP is 10,000 times more energy efficient than Bitcoin. Another Ripple co-founder, Chris Larsen, also suggested that Bitcoin should abandon the consensus mechanism of proof of work.

Of course, there is never a shortage of conspiracy theorists in the market, especially when every tweet from Musk can cause the price of Bitcoin or other cryptocurrencies to rise or fall sharply.

In the past six months, whether Musk changed his profile picture, modified his Twitter introduction, or posted Bitcoin pictures and comments, he was able to drive up the price of Bitcoin. Similarly, he can fully utilize his influence to profit while lowering the price of Bitcoin, whether he is shorting it directly or buying it when the price of Bitcoin falls sharply, which can bring him more profit than selling cars.

In addition, some Weibo users speculated that the digital asset management company Grayscale had previously "shorted Dogecoin" in a high-profile manner, and Musk's action was a counterattack against the other party.

According to Bitpush terminal data, after a sharp drop on Thursday morning, the price of Bitcoin has rebounded slightly and has now risen to above $51,000. Whether Musk's tweet is "getting tired of the old and liking the new" or "playing hard to get", and whether the "thick-browed and big-eyed" Musk has "betrayed the revolution", we still need to observe further.