Crypto Recovers From Elon Dump Led by Proof-of-Stake Coins

Energy-efficient blockchains are leading the crypto rebound after Elon Musk, Tesla CEO, shocked the crypto world yesterday saying the car manufacturer “has suspended vehicle purchases using Bitcoin” because of the fossil fuels needed to run the network. 

Cryptocurrencies running on the Proof-of-Stake consensus mechanism, which is more energy-efficient than Bitcoin’s Proof-of-Work mechanism, make up six of the top 10 24-hour gainers among the top 100 market cap coins. Investors may be piling into PoS blockchains after Musk said that Tesla is “looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.”

Nano, Kusuma, and Cardano are the top gainers in the past 24-hours, up 72%, 18%, and 14% respectively. They all use versions of PoS consensus, as do Hedera Hashgraph, Polkadot, and Algorand, also among the top ten. Nano, Cardano, Hedera, and Algorand took the opportunity to promote their blockchain’s limited environmental impact on Twitter, following Musk’s tweet.

Front-Running a Tweet

There was some evidence that insiders front-ran Musk’s tweet, crypto analyst Willy Woo said, pointing to an inflow of roughly 1,000 Bitcoins to exchanges around the time of the post. As people usually deposit to exchanges in order to sell, it’s possible that a person or entity knew Musk would tweet the Bitcoin-bearish sentiment before he did.

Looking ahead, it appears that the environmental impact of the blockchain is sure to become a hotter topic as teams strive to shape the energy-efficiency narrative in their favor. For the past 24-hours, it’s working for some PoS solutions.