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Tesla-China Tug of War derail Bitcoin, other cryptocurrencies

Another major setback that Tesla experienced in China from March 19, 2021, is that the sale of vehicles of this brand has paralyzed in the world’s largest-populated country.

ISLAMABAD: A tug of war going on between American electric car maker, Tesla and China is believed to have derailed the value and worth of Bitcoin and other cryptocurrencies in recent weeks. Consequently, Bitcoin and other cryptocurrencies have suffered a serious blow in the market. Details collected by The Truth International indicated that in March 2021, China imposed a ban on the entry of Tesla-made cars in defence installations throughout the country. On March 19, China issued a circular stating that vehicles manufactured by Tesla were equipped with radar, camera, and GPS. Hence, these equipment can expose the location of any office or building in use of Chinese military.

Initially, China has imposed a ban on the use of Tesla vehicles in important/sensitive military offices and in the next stage, Chinese officials will carry out inspections of residences of people who are using Tesla cars. This strategic decision has not only upset Tesla company’s high-ups, but it has also created problems for those who have purchased cars of the company in China. Another major setback that Tesla experienced in China from March 19, 2021, is that the sale of vehicles of this brand has paralyzed in the world’s largest-populated country. Additionally, the decision has put at stake Tesla’s manufacturing unit in Shinghai. It is the first Tesla car making unit outside the United States. At present, based in the United States, Tesla is the world’s leading electric vehicles manufacturer in the world.

FILE PHOTO: Tesla Inc CEO Elon Musk dances onstage during a delivery event for Tesla China-made Model 3 cars in Shanghai, China January 7, 2020./File Photo

This strategy of China apparently appears to be a tit-for-tat policy against the United States which has banned China’s Huawei, TikTok and also imposed heavy customs duties on imports from China in 2020. People still remember that America banned Huawei smartphones, claiming that the data of the users can be used for spying. China too has paid in the same coin to America and banned the Tesla cars, citing spying and security risks factors.

Nonetheless, to settle Tesla cars’ score with China, Tesla’s CEO Elon Musk has supported the United States recent move that aimed at discouraging mining of Bitcoin from mid-May. Elon Musk first announced that his company has dropped its decision of accepting Bitcoin to sell cars. He also endorsed the US-based assertions of environmental problems arising out of mining of Bitcoin. Thus, indirectly Tesla’s CEO Elon Musk has undermined the demand and value of Bitcoin, knowingly that 80 percent share of global mining of this cryptocurrency was in the hands of Chinese. Consequently, Bitcoin and other cryptocurrencies have suffered massive setbacks which caused immense financial losses to investors and miners in just a few weeks of May 2021. It is evident from more than a $1 trillion decline in the value of market capitalization of cryptocurrencies with leading share of Bitcoin and Ethereum.

On May 27, 2021, Bitcoin was being traded around $37,500 against its previous highest price of $56,000 at the beginning of May when a tug of war between the United States and China surfaced over mining of Bitcoin amid Americans accusation of use of coal-based energy in mining of cryptocurrency in China. This unexpected development has not only ended the spike in demand and value of Bitcoin and other currencies but also worried millions of investors and miners about the fate of cryptocurrencies in the days ahead. These days all the investors of Bitcoin are showing concerns over the unexpected crash of Bitcoin in the market and looking for alternative ways of investment and source of income.

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