Elon Musk criticises Bitcoin for centralisation and threatens to bet it all on DOGE

The cryptocurrency community lashed out at Elon Musk after his remarks about Bitcoin and the meme cryptocurrency Dogecoin (DOGE). On May 16, Peter McCormack, host of the Digital Gold podcast, published a thread assessing the impact of the Tesla founder’s tweets on the market.

1/ Dear @elonmusk. The perfect troll is one where people don’t know whether it is a troll or not. Your recent poorly informed criticism of #bicoin + support for Doge may be the perfect troll…or you might actually believe this (God I hope not).

— Peter McObnoxious (@PeterMcCormack) May 16, 2021

According to McCormack, in the long run Dogecoin will bring no real benefit, unlike decentralised Bitcoin.

3/ Doge is a meme, a joke, it has no real developers and long-term serves little purpose beyond coin-flipping.

The blocksize debate is over. Bitcoin is the only meaningfully decentralised cryptocurrency serving to solve problems caused by central banking.

— Peter McObnoxious (@PeterMcCormack) May 16, 2021

The podcast host noted that Musk’s statements are harming the Bitcoin ecosystem.

“When you publish false information on Twitter about energy use and promote shitcoins, the market reacts, and a 30% drop in price can lead to a 30% reduction in the amount of money people have for everyday needs,”said McCormack.

In reply, Musk noted that “such unpleasant threads” give him “the urge to bet it all on Doge.” He also reminded that he founded PayPal and understands how money works.

Bitcoin, the first cryptocurrency, Musk described as “very centralised” and dependent on mining companies. As an example, he cited a recent incident at Chinese mines that triggered a temporary drop in hash rate.

Journalist Colin Wu noted that the decline in hash rate caused by inspections in Xinjiang and Sichuan was 15-17%. He added that the provinces have opportunities to use alternative energy sources.

It needs to be clarified that the decline caused by the Xinjiang safety inspection is 17%, while the current power outage in Sichuan dropped by about 15%. Xinjiang also has wind and solar power, and Sichuan is mainly hydropower. China’s mining clean energy usage will reach 50-65% https://t.co/SefVaB5olX pic.twitter.com/oCVH96jSQ7

— Wu Blockchain (@WuBlockchain) May 17, 2021

A further nudge to the discussion came from a user’s tweet. They suggested that Tesla could drop Bitcoin in the next quarter due to rising negativity. In response, Musk wrote: “Indeed.”

Indeed

— Elon Musk (@elonmusk) May 16, 2021

Bitcoin’s price at one point reached $42 185 — the first time since February 8, 2021. It was on that day that Tesla disclosed its position in the first cryptocurrency worth $1.5 bn.

Commenting on the tweet about Bitcoin’s 20% drop, Musk said the automaker still holds Bitcoin.

To clarify speculation, Tesla has not sold any Bitcoin

— Elon Musk (@elonmusk) May 17, 2021

Ari Paul, founder of the crypto hedge fund BlockTower Capital, ruled out Musk’s influence on the price. He said the reasons were “the deterioration of Coinbase and MicroStrategy” equity, as well as a decline in Grayscale Investments’ Bitcoin Trust price relative to its net asset value.

We had 3 months of sideways BTC price action, with Coinbase equity and MicroStrategy weakening, GBTC premium falling off a cliff…this sell-off isn’t about Elon, that was just the excuse for BTC to follow the institutional flows. Zooming out, this is consolidation ahead of

— Ari Paul ⛓️ (@AriDavidPaul) May 16, 2021

“Elon is merely an excuse to break the local range,” noted Paul.

Earlier, Musk said that Dogecoin could “easily” beat Bitcoin. Before that, the team of the main developers of the meme cryptocurrency said that they had been collaborating with the businessman since 2019.

One of the Dogecoin creators, Jackson Palmer, who dumped his coins in 2015, called Elon Musk a “narcissistic fraud,” and his appearance on Saturday Night Live was “cringe.” He added that he would delete the post in a minute because he has “nothing left to say” and “enjoys living a quiet life.”

Jackson Palmer, hidden for years,

steps out from the shadows

executes a headshot with brutal precision

and fades back in 🙌 pic.twitter.com/JWJErWmPeV

— notsofast (@notsofast) May 14, 2021

On May 13, Tesla announced the suspension of electric-vehicle sales for Bitcoin due to concerns about the environmental impact of mining.