Tweets from business leaders like Elon Musk reshape the landscape of assets like bitcoin in a matter of minutes. Be mindful, though. Elon is in the business of sustainable energy and mining bitcoin consumes massive amounts of energy.
Musk bought $1.5 billion worth of bitcoin only a short time before expressing that Tesla will no longer accept bitcoin for payment, pushing the price of bitcoin downward. If bitcoin mining operations in China were crippled by substantially lower the value of the cryptocurrency, it could pave the way for renewable energy companies like Tesla, controlled by Musk, to bring the operation to the United States.
Bitcoin miners need to have the asset at certain levels in order for the operation to be profitable, at least to break even. Each time bitcoin halves (May 2020), the value of the coin needs to appreciate in value for the operation to remain financially viable.
Gaining control in business sometimes requires making it no longer financially viable for a competitor to perform business operations. Digital assets is business, and big business at that. To give some perspective of where this decade old industry reaches today, we should include financial markets and institutions, energy, government regulators, consumers, and retail business across the globe. It is a world-wide part of the economy and to think it will not continue to progress is to be obtuse.
Musk, among other industry titans, have the opportunity to gain massive influence over the industry, and they know it. Post a “tweet” and sink the market? Effecting billions of dollars has never been so immediate. It also opens an opportunity to bring control of bitcoin mining operations to the United States amid a loosely defined regulatory period surrounding the cryptocurrency market.
Musk has a monumental opportunity to mine digital assets (those that require that activity) through renewable energy, rather than coal power currently deployed in other countries.
All opinions are my own and should not be considered investment advice. I am doing this to provide entertainment.
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