Musk is well positioned to direct the direction of the future journey of cryptocurrency

When Elon Musk revealed three months ago that Tesla had bought $ 1.5 billion in bitcoin, digital currency fans claimed that the company would accelerate its wider adoption as a corporate finance tool.

On Wednesday, however, Musk withdrew his approval, swearing that you will accept the cryptocurrency It weakens the justification for using Tesla as a payment for cars and as a destination for parking its spare money.

As usual, Musk’s comments provided immediate fuel to the crypto traders as well as ammunition from the crypto tribal warriors on Twitter. But it was more difficult to know whether his announcement would affect broader perceptions of the currency or what role Musk’s views would play in the next phase of crypto adoption.

“He’s always saying things every two days and it’s not consistent,” said John Coffee, a professor at Columbia Law School. Tesla’s intentions pushes bitcoin into the mainstream Coffee added that corporate use is believed to always have a secondary tendency towards interest in pure financial speculation. “I think his first investment was a currency investment than anything else.”

Anything behind Musk’s love affair with bitcoin has had an impact on market prices it’s hard to ignore it. The price of the currency rose 15 percent on the day Tesla’s investment was revealed, and fell by 6 per cent within 24 hours of this week’s announcement.

He created a conversation between the treasurers, but I don’t think so [Tesla’s investment in bitcoin] he changed anyone’s opinion

Last fall Musk jokingly denounced dogecoin – another cryptocurrency he strongly promoted – and came a few days later “The commotion” on US television, dropping its value by 15 percent.

“It has certainly become the most important factor in cryptography,” JP Thieriot said. Thieriot suggested that it also extends to shaping how people think about digital currency.

Musk, however, cannot force cryptocurrencies to become the main commercial use. He said this week that Tesla has been slow to accept payment in currency due to the environmental impact of energy-intensive “mining” to validate transactions – known specimen he has ignored it in the past.

Many cryptography experts said Musk’s change of heart seemed to allow him to accept that bitcoin payments were not appropriate. Other companies that previously accepted bitcoin as a payment platform, including Dell and Microsoft, later left.

“I don’t think a lot of people want to spend their bitcoin,” said Wilson Withiam, an analyst with crypto research group Messari. “If there really was money behind it [Tesla] did you really do that? “

Musk’s change of heart extended beyond the issue of payments. He also vowed that his electric manufacturer would be an active participant in the bitcoin market, and said he would “not sell bitcoin.”

The engagement shocked Tesla with Wall Street and came in two weeks $ 101 million profit since selling part of its stake, it is worried that the company’s performance will become increasingly tied to the cryptocurrency trade.

The commitment not to sell may reassure some investors, but it also weakened Tesla’s case as part of the day-to-day corporate cash operations of the currency.

Tesla chief financial officer Zach Kirkhorn told Wall Street two weeks ago that the liquidity of the bitcoin market justified Tesla’s cryptocurrency, which meant the company could actively buy and sell it.

That flexibility was especially important, Tesla said, when it had higher demands for funding for its Texas and Texas plants. Germany while dealing with the extreme financial stresses in the supply chain caused by the shortage of semiconductors.

“Being able to get our money in very quickly is very important to us right now,” Kirkhorn said. With a tweet promising to block the company’s cryptocurrency investment, Musk has torpedoed that reason.

Some proponents of bitcoin have said that Musk has helped corporate treasurers pave the way for bitcoin to become more widespread by encouraging other companies to see it as a valuable holding – even if they have been almost no examples others announced that they were buying foreign currency.

Bitcoin’s initial excitement sparked interest – even among treasurers – which is likely to continue beyond its final round, said Rayne Steinberg, CEO of the digital asset management team Arca. “People were talking about that, zeitgeist came in.”

Some corporate treasury experts, however, said the flirtation with Tesla’s cryptocurrency holdings did nothing to encourage wider adoption.

“It created a conversation between the treasurers, but I don’t think it changed anyone’s opinion,” Jerry Klein told Treasury Partners in New York. The main conditions for treasurers to keep the value of their companies ’money were to completely reject cryptocurrencies, Klein added.

But if Musk hadn’t changed the state of bitcoin’s efforts in the world of the currency business, his latest intervention has created another solution: become a monarch to make the future cryptocurrency the opponent of bitcoin or even replace it.

Its reputation for attracting attention to bitcoin’s high energy consumption – and the fact that many of its network members are in China, based on coal-fired power plants – could accelerate the search for alternatives, according to followers. -Co surveys millennials and Gen Z, who are big buyers of cryptocurrencies, showed that they were also very concerned about climate change, Thieriot said in Uphold. “Eventually, those things have to come together,” he said.

Musk’s comments sparked immediate attention among crypto-currency backers who say they have fewer adverse effects on the environment. Meanwhile, Bitcoin Zero – a carbon-neutral version of bitcoin – and Cardano are one of the networks that use so-called proof of participation to validate transactions, consuming less energy.

Most innovative networks, however, have made efforts to gain a share of attention and crypto investment. Most of the attention shifted has been to ether, a digital token used in the ethereum network. With a total value of $ 440 billion, its tokens are worth almost half of bitcoin.

Ether is already being used by some investors as digital money, and the move to a long-planned equity system could take place next year, putting it in a strong position to get more support, Withiam said. Messari analyst.

Musk didn’t immediately show his hand which cryptocurrency he would win when he moved away from bitcoin, but he did give some advice. On Thursday, he wrote: “Working with Doge developers to improve the efficiency of system transactions. Potential future.”

Tesla said it wanted to use a token that consumes less than 1 percent as much energy as bitcoin, a comment that will ensure it will invent crypto investments, and ensure that all glances at the next clue to its thinking are fixed in its tweets.

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