Elon Musk, the Founder and Chief Executive of Tesla Inc. (NASDAQ:TSLA) has announced that the company will stop accepting bitcoin as payment for car purchases. In a tweet, Musk cited concerns about the “rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
“Cryptocurrency is a good idea on many levels, and we believe it has a promising future, but this cannot come at great cost to the environment,” Musk wrote.
However, Musk clearly stated that “Tesla will not be selling any Bitcoin,” and that the company “[intends] to use it for transactions as soon as mining transitions to more sustainable energy.” He also said that Tesla would be looking at “other cryptocurrencies” that use less than 1% of Bitcoin’s energy consumption.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
Crypto Twitter Isn’t Exactly Pleased with Tesla’s Decision
Even though Musk said that Tesla would not be selling any of its Bitcoin holdings, the price of BTC reacted almost immediately to the tweet, dropping nearly 20 percent. Is Musk Going Cold on Crypto? per from roughly $58K to $49K. By press time, the price had recovered to $51,220.
Still, the news appears to have shaken crypto markets across the board. Over the past 24 hours, XRP, Ether (ETH), Binance Coin (BNB), and Internet Computer (ICP) have all fallen more than five percent; Dogecoin (DOGE) and Bitcoin CASH (BCH) are down more than ten percent apiece.
While Bitcoin critics may see the news as a step in the right direction (Musk’s tweet was ‘liked’ nearly 350,000 times), some crypto community members are not exactly pleased with Tesla’s decision.
In reply to Musk’s announcement, Anthony Pompliano, the Founder of Pomp Investments, wrote, “Elon … you realize that 75% of miners use renewable energy, right? This energy story has been debunked over and over again.” The tweet, which was liked nearly 42,000 times, appears to refer to a statement by Ark Investments claiming that 76 percent of Bitcoin miners use renewable energy, a figure that some say is debatable.
Author Preston Pysh replied, “Uh oh. Did someone get yelled at by the government who pays you massive subsidies so you can stay in business each quarter?”
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Bitcoin rewards company replied with a parody of Musk’s original tweet, writing “Lolli has officially suspended buying Teslas. We are deeply concerned about the CEO’s inability to understand that bitcoin is largely mined with renewable energy.”
— Lolli 🍭 (@trylolli) May 12, 2021
Is Musk Going Cold on Crypto?
Makoto Sakuma, a researcher at NLI Research Institute, told Reuters that Tesla’s decision to stop accepting Bitcoin could signal a change in Musk’s attitude toward crypto.
“The issue (of huge energy use by bitcoin miners) has been long known so it’s nothing new,” Sakuma said. “But, taken together with Musk’s recent comments about dogecoin, his latest comments seem to suggest his passion for cryptocurrencies may be waning.” Musk referred to DOGE as a “hustle” during his appearance on comedy sketch show Saturday Night Live last weekend.
Before his appearance on the show, Musk tweeted: “Cryptocurrency is promising, but please invest with caution!”
Cryptocurrency is promising, but please invest with caution! https://t.co/A4kplcP8Vq
— Elon Musk (@elonmusk) May 7, 2021