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Will Telsa and Bitcoin still be found? A tweet from Elon Musk suggests reunification and revival of the crypto market.
The crypto market is gradually returning to the fast lane. Total market capitalization rose over nine percent on a daily basis and rose to US $ 1.69 trillion as a result. With a respectable 12% price increase, Bitcoin is also shaking the dust off the shoulders and increasing the weekly balance by 10%. At the time of going to press, the BTC price is trading at $ 39,700.
In the wake of the crypto reserve currency, it is also pushing altcoins north. Ethereum (ETH), Binance Coin (BNB) and Polkadot each saw an increase of almost eight percent, Cardano (ADA) and XRP share an increase of around seven percent. The bottom of the ten largest cryptocurrencies, Uniswap (UNI), even saw a price increase of twelve percent.
After a rather difficult month of trading, investor sentiment in the crypto market appears to be slowly picking up. The fear and greed index is still on fear at 41 points, but has gained a whopping 26 points since last week.
Musk says yes and no to Bitcoin
The Musk and Bitcoin chapter actually seemed to have come to an end after the Tesla boss walked away from cryptocurrency on Twitter and the company discontinued the BTC buying function. The back and forth wreaked havoc on the crypto market and scratched Musk’s reputation, at least in Hodler circles. While he was introduced as the Bitcoin messiah a short time ago, he fell out of favor just as quickly.
The timeline also raised questions about possible market manipulation. After all, Musk’s timing couldn’t have been better from Tesla’s perspective. After the company announced the purchase of $ 1.5 billion worth of Bitcoin, the price hit an all-time high. Tesla eventually parted with ten percent of its holdings in a very profitable way, and then ditched Bitcoin like a hot potato.
It is precisely this pumping and emptying pattern that Magda Wierzycka, CEO of fintech company Sygnia, accused the Tesla boss in a Cointelegraph article. Musk took the opportunity to present his point of view.
In response to the claim that the price of Bitcoin was being manipulated by a very powerful and influential person, Musk responded:
It is imprecise. Tesla only sold around 10% of its inventory to confirm that BTC can be easily liquidated without moving the market.
If there is confirmation of reasonable (~ 50%) clean energy use by miners with a positive future trend, Tesla will re-allow Bitcoin transactions.
The content of the first part of the sentence can be disputed, as it in no way invalidates the argument of market manipulation. However, attention has drawn attention to the second sentence, in which Musk offers the prospect of a conciliatory end, assuming the mining record shows 50% use of renewable energy.
This is incorrect. Tesla only sold around 10% of the holdings to confirm that BTC could be liquidated easily without moving the market.
When there is confirmation of reasonable (around 50%) clean energy use by miners with a positive future trend, Tesla will resume allowing Bitcoin transactions.
Elon Musk (@elonmusk) June 13, 2021
Musk leaves all options open
Ironically, what happened, which critics like Wierzycka attribute to Musk’s presence on Twitter: The tweet triggered a price hike of nearly US $ 4,000 within hours. Elon Musk did it again and set the market in turmoil. This time, too, the tweet should have been calculated. After all, as the boss of Tesla himself says, his company continues to hold a large stock of BTC.
With the stipulation of 50% renewable energy use, it has also cleverly left a backdoor open, allowing it to re-enter Bitcoin at almost any time. Because the energy balance of the whole mining operation is not recorded at all and is based only on rough statistical models. A 2020 report from the Cambridge Center for Alternative Finance estimates the share of clean energy in mining at 39%. An assessment by asset manager Coinshares two years earlier had yielded a result of 77%. He left open the database that Musk relied on in his decision.
The taproot arrives in November
During a first voting procedure at the beginning of the month, the Taproot update did not find a majority in the Bitcoin community. In the most recent mining difficulty adjustment, miners in the rapid test process have now voted over 90% for the soft fork, which will hit the Bitcoin blockchain in November.
Three updates that build on each other are grouped under Taproot: BIP 340, 341 and 342. The most important of these is the implementation of Schnorr signatures, which increases the anonymity of Bitcoin transactions. Find out here why the update is also beneficial for the evolution of the network.
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