Bitcoin prices slumped 17% on Wednesday night, before recovering some of the losses, after Elon Musk tweeted that Tesla would suspend accepting the cryptocurrency as payment for its cars, due to environmental concerns.
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“We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emission of any fuel,” Musk said on Twitter
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The Tesla
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billionaire founder added that although “cryptocurrency is a good idea on many levels” with a “promising future,” it shouldn’t “come at a great cost to the environment.”
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Bitcoin quickly dropped after the tweet, from nearly $55,000 to $45,700, the lowest since early March, before edging back to more than $51,000 in Asian trading on Thursday.
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Tesla had announced on February 8 that it had bought $1.5 billion of bitcoins and would accept it as payment.
Read: Tesla stock and bitcoin drop after Elon Musk says car sales with crypto will be halted due to energy usage of mining
The outlook. Whether Tesla did sell any cars for bitcoins remains unclear and the company isn’t saying. Meanwhile, the episode shows yet again that “if one person can dramatically alter its spending power, the ‘stable store of value’ criteria of a currency is not met,” as noted by UBS chief economist Paul Donovan.
