Elon Musk revealed that Tesla would no longer accept bitcoin for vehicle transactions, causing the cryptocurrency to plummet.
“Tesla has put a halt to Bitcoin-based vehicle transactions. We are concerned about the increasingly growing use of fossil fuels for Bitcoin mining and transactions, especially coal, which emits the most pollutants of any fuel,” the CEO of an electric car company tweeted.
“Cryptocurrency is a good concept on many levels, and we believe it has a bright future ahead of it, but it cannot come at a high environmental cost.
“Tesla will not sell Bitcoin, and we plan to use it for transactions as soon as mining shifts to more environmentally friendly energy sources. Other cryptocurrencies that use less than 1% of Bitcoin's energy/transaction are also being investigated.”
In the immediate aftermath of the Tesla CEO's tweet, bitcoin dropped from a daily peak of £39,000 to about £37,190. Tesla has been contacted for comment by The Independent.
Mr. Musk has been a vocal supporter of cryptocurrencies over the year, so this is surprising news. “You can now buy a Tesla with Bitcoin,” the CEO tweeted in the middle of the night US time in March.
He went on to say that instead of converting the money into a fiat currency like dollars, Tesla would retain it as cryptocurrency.
“Tesla runs Bitcoin nodes directly, using only internal and open source tools. “Bitcoins charged to Tesla will remain Bitcoins and will not be converted to fiat currency,” he added in another tweet. “Bitcoin payment capability will be available outside of the United States later this year.”
Mr Musk declared his support for the cryptocurrency in January of this year, when he updated his Twitter bio to include the hashtag "#bitcoin" and the symbol "B."
Bitcoin was worth between $30,000 and $40,000 in January, and $57,000 in March, implying that Tesla made between $630 million and $1.35 billion from its investment.
Bitcoin supporters would be outraged by Mr. Musk's tweets, particularly given their impact on the market. However, this isn't the first time the CEO has been chastised for his tweets' financial consequences.
In 2018, the US Securities and Exchange Commission pressured Mr Musk to step down as Tesla chairman as part of a series of concessions he made in a lawsuit claiming he defrauded investors by tweeting about Tesla stock prices. The organization has been contacted for comment by The Independent.
In August of that year, Mr Musk tweeted that he was considering taking Tesla private for $420 per share. Three years later, it was revealed that he was being investigated by regulators for his posts about dogecoin, a fringe cryptocurrency that grew (and fell) in popularity and has been criticized for similar environmental issues like bitcoin.
Bitcoin, the world's ninth most valuable currency, now consumes almost as much energy as Argentina as a whole.
The Independent quoted Charles Hoskinson, CEO of leading cryptography firm IOHK, as saying, "Bitcoin's energy consumption has more than quadrupled since the beginning of its last peak in 2017, and it is set to get worse because energy inefficiency is built into bitcoin's DNA."
Both ethereum (ether) and Cardano (ADA), two of the most common cryptocurrencies, had previously reached all-time highs in price.
The Bank of England, on the other hand, had cautioned that cryptocurrency had "no intrinsic value" and that investors would lose their capital.
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