Citing concerns about the environmental effects from mining and transactions lead to Elon Musk pulling the plug on crypto.
Times Have Changed
It wasn’t that long ago when Elon Musk sent out his breaking news tweet about how Tesla was opening up the gates for crypto and would begin accepting Bitcoin as payment. In fact, it was less than two months ago, but oh how times have changed since then.
Great Cost to the Environment
The Technoking of Tesla and Imperator of Mars, as Elon Musk calls himself these days on Twitter, all of sudden seems to have changed his tune. Why? Citing environmental concerns, his latest tweet stunned the crypto industry by saying:
“Tesla has suspended vehicle purchases using bitcoin. 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 then continues: “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.”
Bitcoin Taking an Immediate Dive
To settle the nerves of crypto holders a little bit, Musk made sure to clearly state that his car company would not be selling any of its Bitcoin, however, the BTC price reacted almost immediately.
Initially dropping as much as 20%, from about $58K down to $49K, Bitcoin did make a recovery and was once again found above the $51K mark shortly thereafter, resulting in a drop of a much less 6%.
Bitcoin wasn’t alone to react as the news did shake the crypto market in general. During the first 24 hours following the tweet, XRP, Ether (ETH), Binance Coin (BNB), and Internet Computer (ICP) all fell more than five percent; Dogecoin (DOGE) and Bitcoin CASH (BCH) were down more than ten percent apiece.
Mining Using Renewable Energy
As expected, the news did not sit well with the crypto community and its members began questioning the Tesla CEO’s understanding of the energy being used by Bitcoin miners.
Although the issue of huge energy use when mining Bitcoin has been long known, the argument that as much as 75% of it is renewable energy, was brought up to point out a potential flaw in Musk’s argument.
Time to Turn up the Heat
Tesla’s new pledge will most likely turn up the heat on the race to move Bitcoin away from fossil fuels. Besides not looking to let go of any of its BTC right now, the company said they:
“intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use less than 1% of Bitcoin’s energy/transaction.”
What the Future Holds
It remains to be seen what the actual outcome will be from all of this as the news has definitely stirred up some emotions in the crypto world. Will Bitcoin be able to continue to stand tall or are the words of Elon Musk enough to make a real dent in its value?