Culture

Tesla says it won't accept bitcoin because of environmental concerns

Technoking, SNL host, and Tesla CEO Elon Musk tweeted the news, sending the price of the cryptocurrency plunging in the process.

SpaceX owner and Tesla CEO Elon Musk (R) gestures as he arrives on the red carpet for the Axel Springer Awards ceremony, in Berlin, on December 1, 2020. (Photo by Britta Pedersen / POOL / AFP) (Photo by BRITTA PEDERSEN/POOL/AFP via Getty Images)
BRITTA PEDERSEN/AFP/Getty Images

Indecisive? Well, yes and no. Tesla CEO Elon Musk today broke the news to the crypto faithful that his electric vehicle-making company won’t accept bitcoin as payment for its vehicles anymore despite recently adding that option. The price of the world’s best-known cryptocurrency dipped drastically (even by its volatile stands) immediately after the announcement.

Tesla & Bitcoin — It was less than two months ago when Tesla announced (via Musk’s Twitter account, again) it would accept bitcoin as payment, sending the price climbing. But today it’s announcement had the reverse effect, shaving thousands of dollars of bitcoin’s price in minutes. The reason for the abrupt U-turn? Newfound environmental worries.

“Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” the message Musk shared reads.

“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.”

Eco-concerns — Bitcoin is “mined” and its transactions are processed by computers solving complex mathematical problems. As time passes and the finite pool of bitcoin grows ever more slowly, the complexity climbs, and more power is required.

Some people (many of them can be found replying to Musk’s post) argue most of that energy comes from fossil fuels and bitcoin is thus hazardous to the environment. Others (equally well represented on Twitter) argue the sooner we also accept our crypto-powered future, the earlier we’ll kiss fossil fuels goodbye and snuggle up to green alternatives. Others add that plenty of bitcoin activity is already powered by sustainable sources.

HODLing — The company won’t, however, be selling any of the remaining pile of bitcoin it holds. Back in February, Tesla bought $1.5 billion worth of bitcoin, only to sell more than $270 million of it a few weeks later for a tidy profit of $100 million. Instead, it plans to make like a bitcoin believer and hold onto it... at least until transactions using it can be enabled by “more sustainable energy.”

Bitcoin’s loss may be Dogecoin’s gain, though, as Musk has also been bullish about it, and at least in part to thank for its stratospheric rise (more than 20,000%) over the last year. Plus, the meme coin is being used by another of Musk’s companies, SpaceX, to pay for a mission. Musk also recently asked his Twitter followers if Tesla should start accepting the Shibu Inu-faced alt-coin as payment before effectively calling it a sham on Saturday Night Live and sending its price tumbling.

The moral of the story? As always, only invest in crypto what you can afford to lose. Because who knows what Musk’s going to tweet next.