Bitcoin prices took a nosedive in the last few houses falling below the $50,000 level for the first time since last month. The drop came after Elon Musk tweeted that Tesla would no longer be accepting the cryptocurrency as a means of payment. Just three months after Tesla announced that it’s going to start accepting Bitcoin as payments for cars, it is putting a stop.
Tesla had very excitedly announced somewhere in March that it would start accepting cryptocurrency as a mode of payment for its electric cars. However, the announcement had met an uproar from environmentalists who were against the idea since Bitcoin consumes a lot of power. Tesla will now stop accepting Bitcoin, citing rising environmental concerns as the reason.
Tesla’s Technoking Elon Musk like every time this time too tweeted about the decision. He tweeted that it’s not worth the trouble and cost to support a cryptocurrency so dependent on fossil fuels and coal to work.
This obviously sent the crypto Twitter and the market into a frenzy throwing Bitcoin all the way down to $46,000. Though it is around $50,000 now but it’s still the lowest in months. This has got people thinking about where they are headed from here. It also makes one wonder whether it is going to be a turning point in the mining industry.
This is not the first time that markets have flipped based on a tweet from Elon. The market is reacting as it has been, though it’s a bit of an overreaction this time.
Musk is talking about this from the fossil fuel perspective which is definitely on-brand for Tesla. However, they are not selling their 1.5 billion of bitcoin so this does raise some questions there. Some are of the view that since no one was using Bitcoin to buy Teslas so maybe that why this move came. They need a good reason to stop this so that the bitcoin community doesn’t infuriate.
While the reason cited is environmental, it is understandable if accepting Bitcoin is cumbersome for Tesla. Bitcoin is a fairly new concept and it takes a lot of time to train people to use these systems.
The environmental concern raised by Tesla is juxtaposed with the idea behind their electric cars and how they are powered. Tesla vehicles are powered by electricity, the same electricity grid that is used to power Bitcoin miners. The only difference is that Bitcoin miners go to where the electricity is cheapest and generally more renewable.
There is a whole lot of conspiracy theories going around whether the environmental concern is the only reason why Tesla is backing out. These issues with Bitcoin are not new and have been there for a very long time. From a gigantic Company like Tesla that’s throwing $1.5 billion in Bitcoin, it’s only reasonable to expect that they’d do their due diligence. So there is a possibility that Tesla is moving away from Bitcoin to resolve issues on their balance sheets. However, these are mere speculations being made by crypto enthusiasts and experts.