CryptocurrenciesTesla Suspends Bitcoin Car Purchases Over Environmental Concerns

Tesla CEO Elon Musk has announced that Tesla would be suspending the option to pay for vehicles using Bitcoin. In a tweet, Elon Musk said Tesla had suspended vehicle purchases using BTC out of concerns of rapid usage of fossil fuels in mining and transactions.

“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. 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” Elon Musk.

Tesla first announced it was accepting BTC for car payments starting in February. The announcement after a $1.5 billion investment in the digital asset as a treasury asset.

Elon Musk further stated Tesla would not be selling any BTC, and they intend to use it for transactions as soon as mining transitions to more sustainable energy. The electric car maker revealed they are looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.

During the first quarter of 2021, Tesla bought $1.5 billion worth of “digital assets,” then sold $272 million worth. According to a financial filing from Tesla on April 26, profits from bitcoin sales specifically allowed the company to notch a $101 million “positive impact” toward profitability.

The electric car maker has been expressing its growing interest in dogecoin, the meme-inspired token.

This past weekend, Elon Musk made his hosting debut Saturday Night Live” and devoted part of his opening monologue and one sketch to talking up dogecoin. He polled his nearly 54 million Twitter followers asking whether Tesla should accept Dogecoin as a payment option. 

However, Instead of helping drive up the price of the meme-inspired token, dogecoin actually tanked 30% over the course of the hour that Musk was hosting SNL.

Performance of Bitcoin

Following the announcement, the price of bitcoin dropped about 5% in the first minutes. The digital currency has continued to decline, falling over 10% in the last 24 hours. As of 10.00 A.M East African Time, bitcoin was exchanging hands at $ 51,177.10.

bitcoin chart
Bitcoin Performance chart

Following Musk’s announcement on Thursday, Dallas Mavericks owner Mark Cuban said that the team will continue to accept BTC and other cryptocurrencies because “we know that replacing Gold as a store of value will help the environment.”

 

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