Elon Musk says Tesla will stop accepting bitcoin for car purchases

Tesla, led by Elon Musk, verified that it bought about $ 1.5 billion in bitcoin in January and expects to start off accepting it as a payment in the upcoming.

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Tesla CEO Elon Musk claimed Wednesday on Twitter that Tesla has “suspended automobile purchases applying bitcoin,” out of worry above “quickly rising use of fossil fuels for bitcoin mining.”

The price of bitcoin dropped about 5% in the very first minutes just after Musk’s announcement.

In an SEC submitting in February, Tesla exposed that it bought $1.5 billion well worth of bitcoin and it may possibly spend in more of bitcoin or other crypto currencies in the foreseeable future.

At that time, the enterprise mentioned it would get started accepting bitcoin as a payment process for its products and solutions.

Assistance for cryptocurrency from Tesla contributed to the price ranges of cryptocurrencies, together with bitcoin and dogecoin, skyrocketing in latest months.

In this article was Musk’s whole announcement:

“Tesla has suspended car buys making use of Bitcoin. We are worried about speedily raising use of fossil fuels for Bitcoin mining and transactions, specifically coal, which has the worst emissions of any gas. Cryptocurrency is a excellent notion on quite a few levels and we believe that it has a promising foreseeable future, but this can’t arrive at great charge to the atmosphere. Tesla will not be selling any Bitcoin and we intend to use it for transactions as quickly as mining transitions to more sustainable electricity. We are also searching at other cryptocurrencies that use <1% of Bitcoin's energy/transaction."

Mainstream investors and some corporate buyers including Tesla, Square, Metromile and Nexon have flocked to bitcoin, viewing the digital currency as a potential inflation hedge while central banks print money to relieve coronavirus-distressed economies.

Major Wall Street banks like Goldman Sachs and Morgan Stanley have also sought to provide their wealthy clients with bitcoin exposure.

But some investors, like Softbank founder Masayoshi Son, still aren’t buying in to the crypto craze.

“There’s a lot of discussion over if it’s a good thing or a bad thing, what’s the true value or is it in a bubble. Honestly speaking, I don’t know,” Son said at a recent earnings conference.

While Tesla said it would not accept bitcoin for vehicle purchases on Wednesday, Musk specified that Tesla plans to hold rather than sell the bitcoin it already has, and would be looking into other cryptocurrencies that require less energy for transactions.

During the first quarter of 2021, Tesla bought $1.5 billion worth of “digital assets,” then sold $272 million worth. According to a financial filing from Tesla on April 26, profits from bitcoin sales specifically allowed the company to notch a $101 million “positive impact” toward profitability.

Musk has been a very public fan of bitcoin and dogecoin, tweeting and joking about these with his millions of Twitter followers over the past year.

This past weekend, the Tesla chief made his hosting debut on “Saturday Night Live” and devoted part of his opening monologue and one sketch to talking up dogecoin. Instead of helping drive up the price of the meme-inspired token, dogecoin actually tanked 30% over the course of the hour that Musk was hosting SNL.

During a frenzied sell-off at that time, the popular trading platform Robinhood experienced an outage in its crypto trading.

Following Musk’s announcement on Thursday, Dallas Mavericks owner Mark Cuban said that the team will continue to accept bitcoin and other crpytocurrencies because “we know that replacing Gold as a store of value will help the environment.”

Mackenzie Sigalos contributed to this report.