New Day, New Tweet!
In a Twitter post on Wednesday, Musk cited concerns about “rapidly increasing use of fossil fuels for Bitcoin mining and transactions,” while signalling that Tesla might accept other cryptocurrencies if they are much less energy intensive. He also said the company won’t be selling any of the Bitcoin it holds.
Bitcoin dropped as much as 15% in Asian trading, sliding below $50,000, before paring some of the drop. It was down about 8% to $50,190 as of 10:53 a.m. in Tokyo. The were reports of outages at digital-token exchanges as people rushed to sell.
Elon Musk’s move comes after Tesla disclosed in February that it had purchased $1.5 billion in Bitcoin and planned to accept it as a payment. That announcement added legitimacy to the cryptocurrency as an increasingly acceptable form of payment and an 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.
Cryptocurrency has been Elon Musk’s new passion. Musk has also tweeted frequently about Dogecoin, a cryptocurrency started as a joke in 2013 — and he quipped about being the “Dogefather” before and during his stint hosting the “Saturday Night Live” show on May 8.
When Tesla’s added Bitcoin as its payment options , it resulted in Bitcoin jump of 16% that day, the biggest one-day gain since the Covid-19 inspired financial markets volatility in March last year.
Other firms like Mastercard Inc., Bank of New York Mellon Corp. are taking steps to make it easier for customers to use cryptocurrencies, fueling the mainstream resurgence.
Bitcoin which moved from about $29,000 at the end of last year to as high as almost $65,000 in April 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 a recent Citigroup Inc. report.
Musk is no stranger to considering the issue of crypto’s environmental impact and this might have resulted in this particular tweet which crashed its value by almost 15%.