Bitcoin, the world’s largest cryptocurrency, dropped to a three-month low on Monday as investors are getting out of their long holdings in the crypto. All this is happening in the wake of Tesla boss Elon Musk's hinting over the weekend that the largest car marker is either considering or may have already sold some of its Bitcoin holdings. Bitcoin FELL MORE THAN 9% ON MONDAY TO US$42,185, its lowest level since 8 Feb 2021. On the other hand, ether, linked to the Ethereum blockchain, FELL ABOUT 8% TO US$3,227.22, while Dogecoin, another hot crypto, FELL NEARLY 7% TO US$0.48. Notably, all three are well under their recent peaks.
Elon Musk’s announcement has sparked a new wave of speculations about whether he has a plan to wean the crypto industry off the fossil fuels that power "Bitcoin mining," the energy-intensive process that verifies a transaction and creates coins. Environmentalists have been criticising bitcoin's energy consumption and its reliance on fossil fuels for a long time. The latest buzz around its high-power consumption is not something that has suddenly popped up during the past two months in which Tesla first decided to accept Bitcoin.
The second-biggest cryptocurrency, Ether is also moving to this system, known as "proof of stake". However, many existing cryptos that rely on this system are still relatively hard to use at scale, as they are lesser-known coins than Bitcoin.