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Updated May 13th, 2021 at 12:08 IST

Elon Musk's Tesla suspends Bitcoin payment citing climate concerns, cryptocurrency sinks

Bitcoin plunged as much as 15% after Elon Musk tweeted that the electric vehicle manufacturer, Tesla, is suspending purchases with the cryptocurrency.

Reported by: Bhavya Sukheja
Elon Musk
IMAGE: AP/UNSPLASH | Image:self
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Bitcoin plunged as much as 15 per cent after Tesla Inc.’s CEO Elon Musk tweeted that the electric vehicle manufacturer is suspending purchases with the cryptocurrency. While taking to Twitter, Musk cited concerns about the “rapidly increasing use of fossil fuels for Bitcoin mining and transactions” and signalled that Tesla might accept other cryptocurrencies if they are much less energy-intensive. Musk even said that the company won’t be selling any of the Bitcoin it currently holds. 

“Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction”. 

According to Bloomberg, following Musk’s tweet, Bitcoin dropped as much as 15 per cent in Asian trading, sliding below $50,000, before paring some of the drop. It was down 8 per cent to $50,190 and there were also reports of outages at digital-token exchanges as people rushed to sell. The world’s largest cryptocurrency dropped from around $54,819 to $45,700, its lowest since March 1. 

Musk’s move comes after Tesla back in February said that it had purchased $1.5 billion in Bitcoin and planned to accept it as payment. His announcement back then had added legitimacy to the cryptocurrency as an increasingly acceptable form of payment and 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 had also noted that Bitcoin was the only cryptocurrency that Tesla accepts in the continental US. 

Netizens point out Musk's hypocrisy

Meanwhile, after Musk’s tweet, several internet users weren’t exactly pleased with the decision. While some shared hilarious memes, others pointed out a little bit of hypocrisy from Musk’s tweet. One user said, “I’m not disappointed by @elonmusk’s concern about the environmental impact of Bitcoin. I’m disappointed that the innovator who has put rockets into space, revolutionized EV vehicles, and changed the game for digital payments didn’t say: “Let’s see if we can fix this”. 

It is worth noting that Bitcoin mining is consuming 66 times more electricity than it did back in late 2015, and the carbon emissions associated with it will likely face increasing scrutiny, according to Bloomberg. 

(Image: AP/Unsplash)

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Published May 13th, 2021 at 12:08 IST

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