Musk bans Bitcoin Tesla vehicle purchases
By Dan Moore
06:46, 13 May 2021
Elon Musk sent Bitcoin prices tumbling by 17% to $46,000 when he announced Tesla was suspending transactions using the cryptocurrency. Musk has expressed concerns about the environmental impact of using Bitcoin for vehicle purchases.
In a Tweet the Tesla CEO wrote: “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.”
A role for cryptocurrencies with Tesla
The word’s second richest man did not slam the door on all cryptocurrencies, though, reassuring his legion of Twitter followers that the company would be exploring the use of other cryptocurrencies that use less than 1% of Bitcoin’s energy-per-transaction.
Musk added on Twitter: “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.”
A recent report by Dutch economist Alex de Vries concluded Bitcoin’s carbon footprint is comparable with that of Slovakia, while a study from Cambridge University said Bitcoin uses more electricity than Argentina.
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Tesla’s Bitcoin interests
Musk’s announcement has been seen by some analysts as a U-turn designed to save face after criticism of the company for buying up $1.5bn worth of Bitcoin in February and stating the currency could be used to buy Teslas.
While the company subsequently offloaded 10% of its Bitcoins, various positive messages on Twitter have been credited with boosting its market value. The latest message knocked Bitcoin’s share price, although it recovered some losses to $50,593 at early Thursday.
Similarly, Dogecoin shares fell 22% following a comment on US sketch show Saturday Night Live from Musk that the cryptocurrency was a “hustle”.
Tesla prices fall
Tesla shares closed down 4.42% on Wednesday at $589. The company still holds a significant amount of Bitcoin, which it had said it doesn’t not intend to sell.
In an earlier tweet aimed at people tempted to invest their life savings in the asset, Elon Musk wrote: “Cryptocurrency is promising, but please invest with caution.”
Read more: Cryptocurrency predictions 2021: will the growth continue?
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