Elon Musk, CEO of Tesla Inc., announced that the electric vehicle maker is halting Bitcoin transactions, causing the digital currency to fall in value.
Elon Musk expressed concern about the “rapidly growing use of fossil fuels for Bitcoin mining and transfers” in a tweet on Wednesday, hinting that Tesla could consider other cryptocurrencies if they are even less energy-intensive. He also mentioned that the company would not be selling any of its Bitcoin holdings.
The biggest cryptocurrency fell as much as 15% in Asian markets, falling below $50,000 before recovering some of the losses. As of 10:53 a.m. in Tokyo, it was down about 8% to $50,190. As people raced to sell their digital tokens, there were rumours of outages at digital-token exchanges.
Elon Musk’s action came after Tesla revealed in February that it had acquired $1.5 billion in Bitcoin and intended to receive it as payment. The announcement added credibility to cryptocurrency as an increasingly appropriate mode of payment and investment, particularly coming from a large S&P 500 company with a high-profile CEO who has a large following among retail investors and the general public.
Tesla’s website, which included a Bitcoin support page, claimed that Bitcoin is the only cryptocurrency that Tesla supports in the continental United States. Musk has also regularly tweeted about Dogecoin, a cryptocurrency that began as a prank in 2013 – and he jokingly referred to himself as the “Dogefather” before and after his time hosting “Saturday Night Live” on May 8.
Elon Musk Tweet
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
According to a new Citigroup Inc. survey, bitcoin mining consumes 66 times more energy than it did in late 2015, and the carbon pollution associated with it will undoubtedly face increased scrutiny.
Many in the cryptocurrency world were taken aback by Musk’s tweet on Wednesday, including Nic Carter, a partner at Castle Investment Management and a leading voice among supporters of Bitcoin’s energy usage.
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