Bitcoin drops around 12% after Elon Musk tweets that Tesla will not accept it as payment
The price of bitcoin has taken a nosedive after Tesla CEO Elon Musk said his company was suspending plans to accept the cryptocurrency as payment for electric vehicles.
Bitcoin was down around 12% early Thursday morning ET —
bringing the coin's price down to about $50,900, according to cryptocurrency
news website Coindesk.
Musk cited the cryptocurrency's high environmental cost as
reason for the move, after months of being bullish on it.
"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," Musk said in a note posted on Twitter
Wednesday. "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 did not immediately respond to questions regarding the
move, including how many vehicles have been purchased with bitcoin and whether
Musk was previously unaware of its environmental impact.
The environmental cost of mining — or creating — digital
currencies has been well-documented for years, with the debate around them
reignited in recent months as cryptocurrency-based tokens known as NFTs
exploded in popularity.
Tesla (TSLA) and Musk have appeared fairly bullish on
bitcoin for at least a few months, with the company disclosing in February that
it had invested $1.5 billion in bitcoin and floating the ability to buy its
cars using the cryptocurrency. Musk tweeted in late March that people "can
now buy a Tesla with Bitcoin."
Musk, who has in the past expressed skepticism about
cryptocurrencies, said in an interview on social app Clubhouse earlier this
year that he thinks bitcoin is on the verge of "getting broad acceptance
by conventional finance people." He said he should have bought the digital
currency eight years ago.
On Wednesday, Musk said Tesla still plans to use bitcoin
after the currency finds cleaner energy sources.
"Tesla will not be selling any Bitcoin and we intend to
use it for transactions as soon as mining transitions to more sustainable
energy," he said. "We are also looking at other cryptocurrencies that
use <1% of Bitcoin's energy/transaction."
Bitcoin isn't the only cryptocurrency Musk has touted in
recent weeks. He has also repeatedly hyped the canine-themed dogecoin, tweeting
about it to his 54 million followers and even sending its price crashing when
he played a character on "Saturday Night Live" who called the
currency a "hustle."
Musk's last tweet before his Wednesday bitcoin about-face
was a poll asking followers if they wanted "Tesla to accept Doge."
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