Electric car manufacturers Tesla Motor’s CEO Elon Musk just tweeted this Wednesday saying that Tesla will not accept Bitcoin as a mode of payment or transaction anymore, stating their concern on the rapid increase in the use of fossil foil in the mining of and transaction of worlds biggest cryptocurrency Bitcoin.
Earlier this year, Tesla announced that it had bought Bitcoin worth $1.5 billion, and later in February, it began accepting Bitcoin as payment for cars. This announcement resulted in a sudden surge in the Bitcoin price, which was around $54 thousand before the latest tweet by Elon Musk.
The world’s largest cryptocurrency, Bitcoin’s price plunged 17% after the tweet; it went from $54,819 to 45,700 in just two hours.
Tesla Motors faced some severe backlash when back in March, it announced that it would start accepting Bitcoin as a mode of payment for the purchase of Tesla Cars. When Tesla first revealed that it had bought $1.5 billion in Bitcoin, investors, analysts, and money managers at some of the country’s largest banks warned that the business was putting itself at risk. Others pointed out that it could damage the company’s credibility. Not just that, this decision was criticized by some prominent environmentalists as well, stating that such a move by Tesla would fast-track the mining and global usage of cryptocurrency since it is believed that crypto mining causes hefty pollution to the environment by using vast amounts of fossil fuel. For example, according to a survey, Bitcoin mining used 7.46 GW of electricity on an average last year, and the figure is now 16.71 GW, according to the same study. On an annual basis, that translates to 147.79 TWh. Elon Musk, who presents himself as an environmentalist and an evangelist for clean energy, was criticized for supporting Bitcoin.
Whether intentionally or unintentionally, Elon Musk has influenced the growth of another kind of cryptocurrency, Dogecoin. Tesla first revealed that bitcoin would be accepted as a form of payment in the United States in March. However, Elon Musk, Tesla’s Technoking, is known for impacting the crypto market by tweeting his thumbs. The joke coin Dogecoin sores in the stocks every time he tweets a picture of a Shiba Inu.Elon, earlier this week, also announced that his aerospace company “SpaceX will start accepting Dogecoin as payment for its linear mission next year.” Tesla’s latest decision regarding Bitcoin doesn’t clear whether it will impact SpaceX’s crypto plans or not.
Ethereum, on the other hand, is a possibility as its price is rising even after Musk’s tweet; it increased by $200, this is because Ethereum miners have plans to move to a more sustainable mining system.
Although it will take time for crypto miners to move to a more energy-efficient mining method, it still holds a considerable market value, and the chance of being a universal transaction or payment mode is always there.
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