Bitcoin drops 12% after Tesla suspends Crypto Payment for its Vehicles

by Emily on May 13, 2021

in Cryptocurrency, Tech News

The price of bitcoin has plummeted after Tesla CEO Elon Musk announced that his company will be suspending the move to accept crytocurrency as payment for its electric vehicles.

According to cryptocurrency news site Coindesk, bitcoin was down around 12% early Thursday morning, which brings the coin’s price down to about $50,900.

After months of being bullish on it, Musk now pointed out that the reason for halting the acceptance of BTC payments is because of the cryptocurrency’s high environmental cost.

Musk said in a note posted on Twitter Wednesday, “We are concerned about 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.”

Tesla has not informed the public regarding how many vehicles have already been purchased with bitcoin and whether Musk was previously not aware of its environmental impact.

The environmental cost of creating, or mining, digital currencies has been well-documented for years, with the debate about them resurfaced in recent months as cryptocurrency-based tokens called non-fungible tokens (NFTs) rose to popularity.

In the recent months, Tesla and Musk have appeared relatively bullish on bitcoin, with the company announcing in February that it had made an investment of $1.5 billion in bitcoin and saying people can soon buy its cars using the cryptocurrency. Musk said on Twitter in late March that people “can now buy a Tesla with Bitcoin.”

Musk said on Wednesday that Tesla still plans to use bitcoin after the currency finds cleaner energy sources. He said, “Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.”

Of course, Bitcoin isn’t the only crypto that Musk has hyped in recent weeks. He has also repeatedly touted the canine-faced dogecoin, tweeting about it to his 54 million followers and even sent its price crashing when he played a character on Saturday Night Live who called the currency a “hustle”.

Musk has tweeted on Tuesday May 11, right before he posted the Tesla-Bitcoin payment halt, a poll asking his followers if they wanted “Tesla to accept Doge”, to which 78% have said “Yes”.

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