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US Fundstrat Tom Lee considers the impact, following Tesla’s Bitcoin settlement cancellation

Cryptocurrency

Consideration of Tesla BTC settlement cancellation

Tom Lee of US investment company Fundstrat examined the impact of Tesla’s Bitcoin (BTC) settlement suspension on the future of crypto assets (virtual currency) on the 16th. He shared his views in an interview with US media Business Insider.

The cryptocurrency market, led by Bitcoin, has been on a sharp downtrend since the 13th of last week. In addition to being inclined to risk off due to the plunge in the stock market, it was also triggered by the announcement by Elon Musk, CEO of US EV giant Tesla, to cancel Bitcoin settlement.

Source: TradingView

Mr. Musk said he highly valued the future of cryptocurrencies, but expressed concern about the increasing use of “fossil fuels” such as coal in Bitcoin mining. Following this announcement, discussions on the environmental impact of BTC mining inside and outside the cryptocurrency industry have rekindled.

Relation:Bitcoin plunge Tesla’s BTC settlement cancellation received

In this regard, Tom Lee, a prominent analyst at Fundstrat, said:

This will not necessarily mean that people have a negative view of Bitcoin, but it will draw attention to the challenges of digital assets.

Shouldn’t it be seen as a call to the Bitcoin industry (as a catalyst for constructive discussions) to seek ways to provide (mining) more efficiently, such as renewable energy?

Is ESG emphasis affected?

After the introduction of Tesla’s Bitcoin payment, the factor that changed its stance is the environmental impact, but it is often pointed out that this was known even before the introduction. Tom Lee said that the background to his remarks was the influence of Tesla’s “ESG investment”, which is conscious of the environment, society, and governance.

Many customers have been attracted to Tesla’s ESG-friendly side. It may be that such a group said, “If you accept virtual currency, you should use something other than Bitcoin.”

Tesla is considering entering the renewable fuel credit market with a view to US government subsidies before the announcement of the cancellation of BTC settlement, according to a Reuters report.

Eight companies, including Tesla, have submitted applications for renewable credits to the US Environmental Protection Agency (EPA), according to people familiar with the matter. The Biden administration, which was launched in January this year, has set a green strategy as its main policy, such as issuing a zero emission declaration, so with the entry of major companies such as Tesla, attention will be paid to the renewable fuel credit market. There is a possibility of collecting.

Environmental issues

Tom Lee thinks that the factor to stop Bitcoin payment can be nodded from the aspect of volatility (price volatility). He mentioned that there is a large risk that the BTC price will fluctuate just between the time of settlement and the delivery of the Tesla vehicle, and pointed out that it may have been more difficult to practical than expected from a “corporate point of view”. ..

He remains bullish on Bitcoin in the medium to long term. By the end of 2021, the price forecast was revised upward when the Bitcoin price reached $ 125,000 (about 14 million yen). As a factor to maintain a bullish stance, he pointed out that there have been no cases of fraudulent tampering with transactions since the inauguration of the Bitcoin network.

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Author: Noah Sakamaki
Reference: Business Insider, Reuters

Images used under Shutterstock license
“Cryptocurrency” means “cryptographic assets”

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