Tesla CEO Elon Musk is no longer keen on investing in bitcoin, which has triggered a drop in the digital currency’s value.
In a post on Twitter, the popular microblogging platform, Elon Musk cited his concerns related to the rapidly increasing usage of fossil fuels for Bitcoin mining as well as transactions. It thereafter signalled that Tesla might accept other cryptocurrencies which are less energy-intensive.
That being said, Musk however said that his electric car company would not be selling any of the BTC tokens it already holds.
Following the tweet, under two hours, the world’s largest cryptocurrency price dropped by 17%, from $54,819 to $45,700, its lowest since March 1. Bitcoin is still up more than 5x in the past year.
Musk’s move comes after Tesla’s February announcement wherein the company disclosed it had purchased $1.5 billion in BTC and plan to accept it as a payment method for their cars.
That announcement went on to lend a massive amount of legitimacy to the cryptocurrency as an acceptable form of payment and investment because it came from a large member of the S&P 500 with a high-profile CEO who commands a huge following both in the business world and in the Twitterverse.
Tesla’s official website had a support page entirely dedicated to Bitcoin, which noted that the token was the only cryptocurrency that the electric car company accepted in the U.S. market. Besides that, Musk has also been frequently tweeting about Dogecoin, a meme cryptocurrency started as a joke in 2013. He quipped about being the ‘Dogefather’ before and during his stint hosting the Saturday Night Live aka SNL, on May 8.
According to a recent report by Citigroup Inc., bitcoin mining is currently consuming 66 times more electricity than it did back in 2015. The carbon emissions associated with it will likely face increasing scrutiny going forward.
Musk is no stranger to the issue of environmental impact when it comes to bitcoin mining.
Last month, Ark Investment Management LLC published a report which said cryptocurrency mining can drive investments in solar power which then would lead to the making of more renewable energy available to the grid.
Jack Dorsey, CEO of Twitter Inc., retweeted the white paper with a comment saying bitcoin ‘incentivizes renewable energy. To that, Musk replied ‘True.’
Musk’s tweet on Wednesday took many crypto enthusiasts by shock and surprise. Nic Carter, Founding Partner at Castle Island Ventures, in a statement about the same, questioned if Musk had done his diligence prior to bitcoin.
When enquired about what promoted this quick reversal, Zachary Kirkhorn, Tesla’s Chief Financial Officer, and Musk were unavailable for comment.
It now remains to be seen how this move will impact bitcoin’s mainstream reputation. We will keep you updated on all future developments. Until then, stay tuned.