Bitcoin Nosedives After Elon Musk Announces Tesla Will No Longer Accept It

The value of Bitcoin has taken a dramatic dive after Tesla CEO — and recent Saturday Night Live host — Elon Musk announced the news that his car company will no longer accept the cryptocurrency as payment.

The announcement immediately resulted in the price of Bitcoin plummeting from $54,500 to $52,000.

In a statement posted to the billionaire’s Twitter, Musk said, “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.

“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. Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy.

“We are also looking at other cryptocurrencies that use (less than 1%) of Bitcoin’s energy/transaction.”

Musk’s environmental concerns are certainly not unfounded, with an analysis by Cambridge University showing Bitcoin consumes around 121.36 terawatt-hours a year, which is more than an entire country.

This is due to the unique “mining” process used to create Bitcoin, which involves rows upon rows of specialist computers which, as you would imagine, involves a lot of power and electricity.

Musk’s previous announcement on February 9 that Tesla would be investing $1.95 billion in the cryptocurrency, with plans for the motor company to accept it as payment in the future, sent Bitcoin soaring past a $56,000 value.

This was a worrying development given the Cambridge study ranked Bitcoin’s electricity consumption above Argentina (121 TWh), the Netherlands (108.8 TWh), the United Arab Emirates (113.20 TWh).

Interestingly, following Musk’s recent hosting stint on SNL, Dogecoin — another form of crypto that Musk has been a vocal advocate for — dropped in value after the mogul’s appearance, despite his promotion of it on the sketch series.

The plunge came as investors sold off the cryptocurrency in the wake of Musk mentioning it, dropping from around 70 cents to just 44 by the time the show wrapped.

Read more stories from The Latch and subscribe to our email newsletter.