Tesla CEO Elon Musk said the company will no longer accept Bitcoin to pay for the purchase of its electric vehicles, as mining this cryptocurrency requires huge amounts of electricity generated from fossil fuels, including coal.
Tesla (TSLA) is suspending Bitcoin payments for its electric vehicles, Gen. director Elon Musk on Wednesday on his Twitter.
Prices for bitcoin and other cryptocurrencies plummeted amid the news.
Tesla began accepting the world’s largest digital currency for payment about two months ago after announcing a $ 1.5 billion purchase of bitcoins and plans to invest in other cryptocurrencies in the future.
According to Musk, mining bitcoins requires a huge amount of electricity generated by burning coal, which creates the largest emissions of other fuels. It is against Tesla’s principles to greet such a cryptocurrency.
At the same time, Musk believes that “cryptocurrency is a good idea on many levels” and “it has a promising future.”
For now, Tesla will be exploring other cryptocurrencies that use more sustainable ways to generate energy. Talk about the greenness of cryptocurrencies has long been widely discussed, so analysts say Tesla’s decision came as no surprise.
At the current rate, Bitcoin mining consumes about the same amount of energy annually as the whole state of the Netherlands in 2019, according to the latest figures from the University of Cambridge and the International Energy Agency.
Experts also point out that 70% of bitcoin mining comes from China, with which the United States has a very tense relationship.
Tesla did not disclose any plans to sell its bitcoins, which are held on the company’s balance sheet, and did not clarify whether customers purchased its electric vehicles with bitcoins.
Some analysts say that the factor of negative impact on the environment can be indicated as an argument for the prohibition of cryptocurrencies by the US and European governments, which have not yet hindered their development and distribution.
Others point out that Musk is one of the most famous proponents of cryptocurrencies, and that the environmental issue raised will be the impetus for the emergence and growth of prices for cryptocurrencies, which are mined on “green energy”.
Tesla shares fell 4.4% on Wednesday and 1.4% before trading opened on Thursday, driven by stock market declines on high inflation data in the US.
Today, a huge cryptocurrency market is being created, which is being joined by both fintech companies in the industry, for example, PayPal (PYPL), and traditional banks Goldman Sachs (GS) and Morgan Stanley (MS). The largest US crypto exchange Coinbase (COIN) recently went public through a direct NASDAQ listing.
Central banks of the USA, EU, China and several other countries are investigating or already testing their own digital currencies, more on this in the Marketinfo.pro article “Wall Street sees risks in the idea of the digital currency of central banks CBDC”.