South African-born billionaire and Tesla CEO Elon Musk wrote in a recent tweet that the electric carmaker has suspended vehicle purchases using Bitcoin over concerns of excessive energy use during the cryptocurrency mining process.
The billionaire stated that the decision aligns with Tesla’s renewable and clean energy company policy. However, he underscored that cryptocurrency is the way of the future and that the company believes it is a sound idea on many levels, albeit one that should not come at a high cost to the environment.
Musk added that Tesla is concerned about the rapidly increasing use of fossil fuels required for Bitcoin mining and transactions, especially coal, which has the worst emissions.
Tesla will not sell its Bitcoin, Musk says
Tesla will not sell its Bitcoin, Musk said, as the company intends to use it for transactions as soon as mining transitions to a more sustainable form of energy usage.
In addition, the South African billionaire disclosed that the electric carmaker will be looking at other cryptocurrencies that use less than 1 percent of Bitcoin’s energy for transactions.
Musk’s tweet wipes away $365 billion
Musk’s tweet sent shockwaves through the cryptomarket, wiping away as much as $365.85 billion, CNBC reported.
Subsequently, the market recovered some of the losses. However, Bitcoin, Ethereum and XRP are still trading lower than they were before the tweet.
On Feb. 8, Tesla announced in an SEC filing that it had invested $1.5 billion into Bitcoin as part of a new investment policy designed to diversify and maximize returns on cash not required to maintain adequate operating liquidity.
Under the policy, Musk revealed that Tesla will accept Bitcoin as payment for products in the future.
The decision sent Bitcoin soaring to record highs. To realize some of the gains from the transaction, Tesla sold $272 million worth of Bitcoin in the first quarter of 2021, and this allowed the company to pocket a $101-million gain during the quarter.
