The past few months have been a really tough ride for Bitcoin investors. Since April 13, when the asset’s value touched its record high of 79,723.39 CAD, Bitcoin has been dipping overall.
However, the current market status suggests that it has, anyhow, improved in its year-to-date value this fiscal year. At the moment when this article is being written, it is priced at 40,582.74 CAD, which is an 8.40% increase in its value.
Nonetheless, the investors are growing skeptical, especially after SpaceX founder Elon Musk’s tweet and the Chinese government’s explicit order to central banks not to deal or support digital currencies in the region.
Believe it or not, Bitcoin investments could still be great if you know how to do it properly.
But, before we get to the right way to do it, let’s give you some basic and factual information to help you make up your mind.
- Bitcoin is one of the most popular and most significant digital assets being traded to date.
- Since its introduction to the market in 2009, it has bagged 9,290.95% growth.
- Bitcoin has gained 219.66% in its value since July 2020 in one year.
- Institutional investors are using Bitcoin and other cryptocurrencies as a hedge against inflation.
- El-Salvador has become the first country to accept Bitcoin as a legal tender in June this year.
- Long-term HODLers are already expecting exponential growth in capital gains.
The Elon Musk Effect
Elon Musk’s Tesla and SpaceX have been some of the most prominent institutional investors in Bitcoin. In fact, a few months ago, Musk announced that Tesla would be accepting Bitcoins for selling Tesla models.
However, one tweet from him in May created ripples amongst the whole crypto world.
Musk quoted Bitcoins as being environmentally unfriendly. He also added that Tesla wouldn’t be accepting Bitcoins to sell its models.
The high energy costs associated with crypto mining and their environmental impact were some of the concerns that Tesla’s CEO mentioned in his tweet.
He also said that Tesla wouldn’t be selling any of its Bitcoin holdings but instead would be using it as soon as the mining process becomes more sustainable.
Now, here’s the catch – Tesla has stopped accepting Bitcoins over environmental concerns, stating mining consumes a lot of electricity. Since most of the electrical energy is produced from fossil fuels, the environmental impact is too significant.
However, the same energy is also used to power the grids for charging Tesla’s electric cars.
That’s a lot of mixed values and concerns, as a CNBC news report suggests.
Following Musk’s tweet, Bitcoin’s value dipped drastically within hours. By the next day, it was already halfway to its peak value of April 2021.
The Chinese Government
China’s take on miners and banks dealing in cryptocurrencies has also been a colossal cornering force for investors.
Although the government has not yet implemented any ban as such on cryptocurrencies, it has been issuing warnings to large miners and banks.
According to reports, China produces the most hash rates in the world. The three giant mining provinces in China have already been screwing up on the miners.
The government has quoted cryptocurrency’s high volatility and its possible application in illegal transactions as the reason for precautionary actions.