Bitcoin Price Tumbles After Musk Tweets Concerns Over Fossil Fuel Use In Crypto Mining

  • Elon Musk said the electric-vehicle manufacturer is suspending purchases using Bitcoin, triggering a slide in the digital currency.
  • In a Twitter post on Wednesday, Musk cited worries about “rapidly increasing use of fossil fuels for Bitcoin mining and transactions.”
  • Ether and Dogecoin also slid and the rush to sell caused brief outages at some cryptocurrency exchanges. 

Dana Hull & Dave Liedtka from Bloomberg writes:

Tesla Inc.’s Chief Executive Officer Elon Musk said the electric-vehicle manufacturer is suspending purchases using Bitcoin, triggering a slide in the digital currency.

In a post on Twitter Wednesday, Musk cited concerns about “rapidly increasing use of fossil fuels for Bitcoin mining and transactions,” while signaling that Tesla might accept other cryptocurrencies if they are much less energy intensive. He also said the company won’t be selling any of the Bitcoin it holds.

The largest cryptocurrency dropped as much as 15% to just above $46,000, before paring some of the retreat. It was down about 6% to $51,210 as of 7:03 a.m. in London on Thursday. Other tokens such Ether and Dogecoin also slid. The rush to sell briefly caused outages at some cryptocurrency exchanges. Bitcoin is still up more than fivefold in the past year.

Musk’s move comes after Tesla disclosed in February that it had purchased $1.5 billion in Bitcoin and planned to accept it as a payment. That announcement added legitimacy to the cryptocurrency as an increasingly acceptable form of payment and an investment, especially coming from a large member of the S&P 500 with a high-profile CEO who commands a big following among retail investors and the general public.

Tesla’s website, which had a support page dedicated to Bitcoin, noted that the token was the only cryptocurrency that Tesla accepts in the continental U.S. Musk has also tweeted frequently about Dogecoin, a cryptocurrency started as a joke in 2013 — and he quipped about being the “Dogefather” before and during his stint hosting the “Saturday Night Live” show on May 8. He tweeted on Tuesday, “Do you want Tesla to accept Doge?”

Tesla’s addition of Bitcoin to its balance sheet was the most visible catalyst during this year’s rally in the digital currency. Bitcoin jumped 16% that day, the biggest one-day gain since the Covid-19 induced financial markets volatility in March 2020…”

See full story here.



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