“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,” Musk said in a statement. “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.”
In February, Musk announced that Tesla had invested $1.5 billion in bitcoin and said the company would start accepting bitcoin payments, setting off a flurry of criticism from environmental advocates concerned about the energy consumption and carbon emissions associated with the cryptocurrency. Bitcoin’s value received a notable bump after Musk revealed Tesla’s investment.
On Wednesday, the cryptocurrency market again reacted swiftly to Musk’s reversal.
When he posted a statement on Twitter around 3:06 p.m. in California, the value of a bitcoin was about $54,600. Two hours later, it hit its low point for the day at $46,980, according to data from Coinmarketcap.com. The value recovered a bit, rising to a little over $50,000 by the end of the day.
Although the dip caused some people to sell, many bitcoin defenders pointed out that the currency has seen steep crashes in the past — including at the beginning of March and April — and has recovered. In fact, bitcoin’s value surpassed $50,000 for the first time in February amid a record climb that started in 2020.
Musk has been dabbling in cryptocurrencies for some time, and his tweets and public statements have been known to trigger fluctuations in the market.
When he hosted “Saturday Night Live” last week, Musk joked about his relationship to the alternative cryptocurrency, calling Dogecoin a “hustle.” Immediately, the value tanked, sinking from 65 cents to 44 cents overnight.
Some prominent figures in the tech world, including Bill Gates, have been critical of the impact that cryptocurrencies have on climate change. Early on Thursday morning, Musk chimed in again on Twitter with a graph showing rising energy consumption for bitcoin.
“Energy usage trend over past few months is insane,” Musk tweeted.
But others have promoted the hope that bitcoin may eventually be good for the environment.
Despite his recent enthusiasm for bitcoin, Musk said Tesla will not change its position until the currency uses fewer fossil fuels.
“We intend to use it for transactions as soon as mining transitions to more sustainable energy,” he said in a statement.
But he also floated the possibility that the company could turn to alternative cryptocurrencies that don’t contribute as many carbon emissions.
“We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction,” he said.