A tiff over the environmental credentials of Bitcoin that erupted between two billionaires is filtering into the newly empowered world of retail trading, rankling new investors who have embraced cryptocurrencies.
Elon Musk, the world’s second-richest person, tweeted late on Wednesday that Tesla Inc. wouldn’t take payment in Bitcoin for its electric vehicles. (The billionaire had announced in March that the company would accept the cryptocurrency.)
“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk wrote.
Minutes later, another billionaire tweeted a retort.
“We know that replacing gold as a store of value will help the environment,” said Mark Cuban, owner of the Dallas Mavericks NBA team and a crypto bull.
Also read: Bitcoin Is Red Hot. Can It Ever Be Green?: QuickTake
Musk’s comments wrought havoc on Bitcoin’s price, which dropped to almost $46,000 before paring its decline.
The billionaire Winklevoss twins remained bullish. Cameron Winklevoss said Musk would refresh his position when he realizes that Bitcoin mining “is actually pushing the renewable energy industry forward.” His brother Tyler encouraged people to buy the dip.
And Musk’s unexpected shift annoyed many new retail traders who have been encouraged over the past few months by the growing mainstream acceptance of Bitcoin by big firms, including Tesla — at least until Wednesday evening. And it prompted speculation over his involvement in markets.
“Selfish and callous.” That’s how Oluwafisayo Williams, a 32-year-old doctor from Sheffield, U.K., described Musk’s change of heart. Williams started aggressively investing in cryptocurrencies earlier this year. He smells something “fishy” at worst and hypocritical at least.
“If Bitcoin is bad for the environment, we should ask Elon about the carbon footprint of his SpaceX rocket,” Williams wrote in a message. “I don't think Elon spent time studying Bitcoin. It’s either that or he is exploiting his power to control the market.”
Tesla’s first-quarter earnings were bolstered by the sale of 10% of its Bitcoin holdings. (The company disclosed in February that it had invested $1.5 billion in the cryptocurrency). Musk said last month the disposal was intended to demonstrate the token’s liquidity, and added that he’s retained his personal investment in Bitcoin. Musk has also tweeted frequently about Dogecoin, a cryptocurrency started as a joke in 2013 — and quipped about being the “Dogefather” before and during his stint hosting “Saturday Night Live” on May 8.
Also read: Musk’s Bitcoin Backpedaling Is Latest in Long Line of Turnabouts
Williams is unconcerned by Musk’s views, and describes himself as still bullish. Besides, in his view, Bitcoin will soon be bigger than Musk.
Some crypto industry insiders say the entire matter is overblown and the current price decline presents a buying opportunity. “This may be the selloff that sets Bitcoin up for new all-time highs,” said David Grider of Fundstrat Global Advisors LLC.
Crypto bull and billionaire Mike Novogratz, meanwhile, encouraged his followers to buy Bitcoin, and said Musk is simply trying to use his influence to push crypto mining toward a greener future.
Brash Barstool Sports founder Dave Portnoy, who has built a following among retail investors, wasn’t pleased by Musk’s move. In a video, he said that the billionaire changing stances so quickly is “playing with people’s futures, their fortunes.”
Aaron Smith, a 29-year-old retail trader from Essex in the U.K. who has been moving large chunks of his portfolio into cryptocurrencies, says Musk needs to learn more about digital currencies. In Smith’s mind, Cuban may have a role here.
“I can only imagine people are trying to educate” Musk further on the matter, Smith wrote in a message.
Smith, too, remains bullish on crypto, and feel’s Musk’s change was a knee-jerk reaction. As for billionaires weighing in from their perches on Twitter, swaying the price of Bitcoin?
“Billionaires are influential in all markets. Not just crypto,” Smith said. “But you see a quicker reaction in crypto because the market cap is smaller.”
— With assistance by Joanna Ossinger