Analysis: 3 reasons why Bitcoin is not affected by Elon Musk

When Tesla CEO Elon Musk criticized Bitcoin’s energy consumption, the price of Bitcoin dropped by 17%, but now Bitcoin has rebounded.

On May 13, Bitcoin fell to $45,600, and now it reaches $51,000, having recovered more than half of the decline. 

As this dramatic event continued to spread, Cointelegraph considered why, on a basic level, Bitcoin can ultimately resist the actions of a single user—no matter how influential he or she is.

Proof of work has no effect

Bitcoin’s Proof of Work (PoW) algorithm over time has brought rewards to miners and investors as their years of work have made the network stronger.

The longer Bitcoin lasts, the less likely it is to be attacked, or the less likely it is to see participants leave the Bitcoin network to use another cryptocurrency. 

This is why Bitcoin continues to be the preferred cryptocurrency in the competition-as many people believe, no altcoin can “make Bitcoin” like Bitcoin. 

However, for Musk, there is another reason why proof of work is important. Just because a well-known investor changed their views on the value of Bitcoin, causing the price of Bitcoin to fall, miners have no additional incentives to withdraw from the network or cash out.

This “network effect” means that Musk ultimately provided Bitcoin with good rather than bad publicity-even the price showed that his words and actions did not change the nature of Bitcoin or its capabilities.

PlanB, the creator of the Bitcoin price model stock-to-flow, commented on this phenomenon: “Why Proof of Work is important for Bitcoin? Because effective hashing (PoW) is a way for P2P nodes to know that a block is valid. , Without the need for a server or a trusted third party”.

“Without PoW, Bitcoin is dead!”


Bitcoin’s 7-day average computing power for 1 year. Source:

The price trend has no effect

Although the price of Bitcoin suddenly dropped after Musk’s remarks, the recent price trend of Bitcoin speaks more of its ability to resist criticism, rather than its susceptibility.

In this event, BTC/USD only fell for two hours before rebounding and maintaining a higher price. Not only that, this decline is also in line with this year’s regular price behavior, and did not even violate any long-term price trend.

The 21-week exponential moving average (EMA) is a particularly important feature of the 2020-2021 bull market. Analysts said that this level will determine the bottom of the price when it falls—even in the last bull market in 2017, this level was maintained.

This time, Musk also failed to overthrow the indicator. Bitcoin stopped falling when it encountered 21EMA during the fall, and the lowest briefly touched $45,650.

1620904536160362BTC/USD weekly chart (Bitstamp) and 21-week exponential moving average. Source: Tradingview

Bitcoin’s energy “consumption” has no effect

Like the previous views on Bitcoin, it needs to be viewed for a long time.

Once Musk’s personal energy criticism settles, the broader “debate” about the environmental protection of Bitcoin will continue after him. However, most common accusations have long been debunked because of short-sightedness and lack of evidence.

Just last week, MicroStrategy CEO Michael Saylor emphasized in a public interview that the claim that Bitcoin is “harmful” to the environment lacks intrinsic value.

In response to Musk, he called Tesla’s decision to stop accepting Bitcoin payments “ironically.”

He wrote on Twitter: “The irony is that no extra energy is used in Bitcoin transactions.”

“Energy is used to protect the network of crypto assets. Taking all factors into account, the net impact on fossil fuel consumption will be negative over time.”

Therefore, expanding one’s time horizon is crucial to understanding why Bitcoin is worthwhile. As Saifedean Ammous, the author of the best-selling book “Bitcoin Standard” often mentioned, “low time preference” makes Bitcoin investors understand that refusing to use reliable currencies for environmental reasons will lead to more energy wasted in unreliable ones. Substitutes.

This time, Ammou didn’t mean anything.

He wrote on Twitter: “Unless you also switch rocket and battery manufacturing to’more sustainable energy’, you will look like an ignorant hypocrite.” He was referring to SpaceX, another Musk company. .

“The world needs a sound currency more than your rockets and government-subsidized electric cars.

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