Tesla CEO Elon Musk took to Twitter to announce that Tesla would stop accepting bitcoin as payment for its vehicles. The reason cited was that bitcoin mining consumed far too much energy and was damaging the environment. The announcement agitated the cryptocurrency market and Bitcoin responded by turning red with a drop of around 16% in just few hours.
The tweet specifically states that Tesla is concerned about the increasing use of fossil fuel, especially coal. While the note stated the benefits of cryptocurrencies, Musk stated that it should not come at the cost of the environment.
The tweet also revealed Tesla will continue to keep its bitcoin holdings and resume bitcoin transactions once mining transitions to renewable energy. The company will also look for cryptocurrencies that consume less than <1% of bitcoin’s energy/transaction.
Tesla only began accepting bitcoin payments about two months ago and the decision to stop is a quick U-turn that has greatly affected the Bitcoin market. The quick change of heart from Musk who has been one of the market’s strongest high-profile supporters, has caused a huge market lost of about $365 billion. However, the market has slightly recovered.
Some in the market have complained about how Musk’s influence has a seismic effect on the market, whether good or bad. His recent bitcoin news has tanked the market as a whole and for the first time in months, the price of bitcoin had crashed to below $50,000, and it currently sits at roughly $51,000.
The complaint is that Musk has enough clout to influence the market, which is a questionable matter on the whole and several figures in the cryptocurrency space chimed in with their thoughts. Some of them seemed to blame Musk for being seemingly ignorant. Blockstream CSO and Pixelmatic CEO Samson Mow responded to the tweet as “uneducated,” even going so far as to say that he would never buy another Tesla product. While Cameron Winklevoss was far more friendly with his response, simply saying that bitcoin is pushing the renewable energy industry forward and expecting Musk to refresh his position.
Amid the argument about bitcoin’s energy consumption with some saying it is as high as 70%, while others say it is 39%, report has it that the industry is making note of these concerns and working towards going green.