FinTech News
Tesla Discontinues Acceptance of Bitcoin for Vehicles
Elon giveth and Elon taketh away. Less than six weeks after Tesla began accepting Bitcoin as a form of payment for its famed electric vehicles, Musk has announced that the company will halt this practice. In turn, the price of $BTC has fallen sharply.
In a tweet, Musk cited environmental concerns related to the mining of Bitcoin as the reason why the car company was suspending acceptance. He wrote, “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worse emissions of any fuel.” Musk continued, “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.”
Not only had Tesla been accepting Bitcoin for vehicles but also announced in February that it had purchased $1.5 billion worth of the cryptocurrency — news that shot $BTC to then-record highs. On that note, Musk states that the company will not be selling any of its Bitcoin holdings at this time and plans to utilize it for transactions “as soon as mining transitions to a more suitable energy.” Furthermore, Musk says that Tesla is exploring other cryptocurrencies.
Just as Tesla’s initial Bitcoin announcement had a major effect on the market, news of this suspension also rocked the price of $BTC. On Wednesday, Bitcoin went from around $55,000 midday to as low as $45,000 following Musk’s tweet. As of this writing, Bitcoin has managed to crawl back up past the $50k mark, which it first broke through with the help of Tesla’s investment reveal.
This is actually the second time in a week that Musk has seemingly had an impact on cryptocurrency trading. As a supporter of the rocketing “memecoin” Dogecoin, some had expected that Musk’s stint as host of Saturday Night Live last week would boost the cryptocurrency’s price. Instead, Doge ended up falling during the broadcast, which did feature some jokes about the asset.
Although it seems as though the Bitcoin market is already beginning to shake off this news, it remains to be seen whether Tesla’s concerns are echoed by other companies that have begun investing in cryptocurrencies. That said, some have already started pushing back on Musk’s assertions, which could imaginably delay the need for companies to “choose a side.” Ultimately though, regardless of what happens with Tesla’s Bitcoin acceptance program, it looks as though the car company and the cryptocurrency will be intertwined for some time.
